NEED TO KNOW

• Trump signed an executive order in December directing the DOJ to sue states over AI laws
• A bipartisan coalition of 36 state AGs urged Congress to reject the federal preemption push
• Legal experts say only Congress can actually override state AI laws — not an executive order

WASHINGTON, D.C. (TDR) — President Trump’s December executive order directing federal agencies to challenge state artificial intelligence laws is hitting a wall — in court, in Congress, and inside his own party.

The big picture: The battle over who regulates AI isn’t just a tech policy dispute — it’s a federalism fight that cuts across traditional partisan lines, pitting Washington’s deregulatory ambitions against state-level consumer protection laws that red and blue states alike have spent years building.

• More than 1,000 AI-related bills were introduced across U.S. states and territories in 2025, with dozens enacted into law — covering everything from banning nonconsensual deepfakes to mandating algorithmic transparency disclosures
• The White House frames the push as necessary to avoid a “patchwork” of state laws that would burden developers and slow U.S. competitiveness in the global AI race

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Why it matters: The outcome shapes whether state residents keep protections their own legislatures passed — or whether Washington’s preferred hands-off approach becomes the de facto national standard by default.

• State attorneys general argue a broad federal preemption would prevent states from responding quickly to AI risks — including threats to children’s mental health and exposure to inappropriate content
• Laws in Colorado, California, Texas, and Utah — covering algorithmic discrimination, transparency, and consumer protection — are directly in the crosshairs
• Companies operating under state AI laws face a compliance bind: the executive order cannot, by itself, overturn those laws, and penalties for noncompliance remain in effect

Driving the news: The December 11 executive order is the Trump administration’s third attempt to neutralize state AI regulation after two legislative routes collapsed.

• A 10-year moratorium on state AI laws in the “Big Beautiful Bill” was stripped from the Senate version after significant bipartisan pushback
• A similar provision in the National Defense Authorization Act of 2026 was also removed in the face of cross-party opposition
• The executive order directs the DOJ to establish an AI Litigation Task Force to challenge state laws and tasks White House advisors with drafting legislation to establish a uniform federal framework that preempts conflicting state rules
• The order also conditions federal broadband funding on states’ willingness to align with the administration’s AI policy — a pressure mechanism likely to face its own legal challenges

What they’re saying: Supporters frame the order as a necessary defense of American innovation; opponents — including members of Trump’s own coalition — say it strips communities of protection on the issues that matter most.

• Sen. Ted Cruz, R-TX, the order’s most prominent congressional ally, stood alongside Trump at the signing ceremony and has championed a federal standard as essential to keeping U.S. AI companies competitive
• Michael Toscano of the conservative Institute for Family Studies called the order “a huge lost opportunity” and said it “doesn’t make sense for a populist movement to cut out the people on the most critical issue of our day”
• Connecticut AG William Tong, leading the bipartisan 36-state coalition, wrote that “broad preemption of state protections is particularly ill-advised” given how quickly AI technology evolves and the need for agile regulatory responses

Yes, but: The administration’s legal case is thin — and its own legal advisors appear to know it.

• An executive order carries no preemptive force on its own — it is not a statute enacted by Congress nor a regulation passed under congressional authorization
• The FCC, one of the agencies tasked with enforcing the order’s preemption strategy, has no prior jurisdiction over AI providers and cannot credibly claim authority it has never asserted
• The administration failed to secure federal preemption through Congress, effectively leaving the states in control — making the executive order route a weaker substitute

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Between the lines: The administration’s strategy isn’t really about winning in court — it’s about creating enough legal uncertainty to chill state enforcement.

• The order directs agencies to investigate companies that comply with certain state AI laws — a signal that compliance itself could invite federal scrutiny, regardless of whether courts ultimately uphold the order
• The Commerce Department was directed to publish a list of “potentially unconstitutional” state AI laws by March 11, 2026 — a naming-and-shaming mechanism designed to pressure states before any case reaches a courtroom

What’s next:

• Commerce Department’s list of targeted state AI laws was due March 11, 2026 — watch for which states and laws are named
• Colorado’s AI Act takes effect June 30, 2026 — likely the DOJ Task Force’s first litigation target
• Courts will test key constitutional questions: the scope of executive power to condition federal grants, the Dormant Commerce Clause limits on state AI laws, and whether the Major Questions Doctrine bars agency action without clear congressional authorization
• Congress remains the only actor that can resolve this definitively — and so far has refused to act

When the federal government claims states are too slow to regulate emerging technology — but Congress is slower still — who actually protects the people waiting for either branch to move?

Sources

This report was compiled using information from the White House, NPR, Ropes & Gray, Sidley Austin, and the National Association of Attorneys General coalition letter.

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