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On December 11, 2025, President Donald J. Trump signed an executive order titled Ensuring a National Policy Framework for Artificial Intelligence (Executive Order). According to the Trump Administration, the goal is to create a uniform federal approach to AI policy and reduce conflicting rules across different states. For businesses operating in the AI industry, the Executive Order likely means more legal uncertainty, at least in the short term.
State of AI Regulation in the United States
As with other rapidly evolving technologies, federal and state regulations have failed to keep up with the development and adoption of artificial intelligence. Congress has considered numerous bills addressing AI, but has yet to enact any comprehensive regulatory framework. Instead, federal laws addressing AI have largely focused on the federal government's research, development, and implementation of AI.
In the absence of comprehensive federal legislation, several states have adopted their own AI laws. According to the National Conference of State Legislatures, as of late April 2025, at least 48 states and Puerto Rico had introduced more than 1,000 bills that include the term AI in the 2025 legislative season. The bills vary in scope, including mentions of AI in broader legislation, the establishment of task forces to study aspects of AI, and requirements for disclosures regarding AI-generated content. California leads the nation in AI regulation, with several key AI laws enacted in late 2024/2025. They include the
Transparency in Frontier AI Act (SB 53), requiring risk reporting; the California AI Transparency Act (AB 316/AB 853), mandating AI detection/watermarking; and the Companion Chatbot Law (SB 243), protecting minors with disclaimers and safety.
Key Provisions of the President's AI Executive Order
President Trump'sExecutive Order declares that the United States should sustain and enhance its global AI leadership through a "minimally burdensome national policy framework." It further aims to limit state-level regulation and consolidate authority at the federal level. Below is a brief summary of several key provisions:
- AI Litigation Task Force: The Attorney General is tasked with creating an AI Litigation Task Force, which will be responsible for challenging state AI laws in federal court on the grounds that they unconstitutionally burden interstate commerce, are preempted by federal regulations, or are otherwise unlawful in the Attorney General's judgment.
- State AI Laws: The Secretary of Commerce must evaluate existing state AI laws and identify "onerous" ones that may violate federal policy set forth in the Executive Order, including those that require AI models to "alter truthful outputs" or compel developers to disclose information conflicting with First Amendment rights.
- Federal Funding: The Executive Order instructs agencies to consider limiting access to certain federal grants or Broadband Equity Access and Deployment (BEAD) funding for states with AI laws deemed conflicting.
- Agency Action: The Federal Communications Commission (FCC) is directed to explore federal reporting and disclosure standards for AI models that could override state requirements. Additionally,theFederal Trade Commission(FTC) must issue guidance on how its consumer protection authority applies to AI outputs.
- Legislative Action: The Executive Order also calls for a legislative proposal to Congress to create a uniform federal AI framework that would preempt conflicting state laws going forward. That effort would not preempt all state actions — for example, laws on child safety, AI computer and data center infrastructure, and state government procurement are slated to be exceptions.
What's Next?
While it doesn't create any new law, the Trump Administration's Executive Order on AI lays out where the executive branch believes AI policy should go, and gives federal agencies tools to start shaping regulation accordingly. However, it does not mean an end to the legal uncertainty facing the AI industry.
Instead, the Executive Order will likely be a flashpoint in ongoing AI policy discussions in the months ahead. Given the legal and political debates over state vs. federal authority, it may also be subject to legal challenges, particularly regarding preemption.
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