Trump Admin Drafts Executive Order Challenging AI Laws at State Level

Sources close to the White House say Trump’s administration is drafting an executive order that would limit how states regulate AI. The move would represent a significant escalation in a long-running dispute over who should lead the development of rules for AI systems between Washington and state capitals. 

The order instructs AG Pam Bondi to assemble a federal task force that would challenge state AI laws. The team would argue that regulations created at the state level interfere with the federal government’s authority over interstate commerce. It would also seek other avenues to question the legality of those measures. 

Supporters of placing AI oversight primarily in federal hands, including Senator Ted Cruz and several high-profile tech sector investors, contend that a nationwide standard is necessary. They say a mixture of rules written in dozens of states would burden American companies, especially younger firms trying to compete with larger rivals. 

State-level advocates counter that Congress is moving too slowly to address the risks tied to AI. They argue that local action has become essential as new tools raise concerns about safety, fairness, and accountability. While many in the camp say they would rather see a comprehensive federal law, they believe incremental steps at the state level are still better than waiting indefinitely for Congress to act. 

The Center for Democracy and Technology, a digital rights group that receives some funding from the tech industry, criticized the draft order. Travis Hall, who directs its work with states, said the president cannot override state laws with an executive order. Hall added that only Congress can decide questions of preemption and noted that lawmakers have considered and rejected such proposals. 

Earlier this year, the Senate voted overwhelmingly against a push by Cruz to include a temporary freeze on state AI laws in a major legislative package. This week, Trump repeated his call for a single national framework, noting that the country needs one federal standard rather than what he described as fifty different systems. 

His comments came shortly before Representative Steve Scalise said he would push to insert similar language into the National Defense Authorization Act. 

The president reiterated his stance during the Saudi-U.S. Investment Forum, arguing that companies should not have to navigate fifty separate sets of rules. He said a single state with tough requirements could force firms to follow its approach nationwide, which he described as unworkable. 

Entities like Core AI Holdings Inc. (NASDAQ: CHAI) are likely to take an interest in this debate since any rules, or lack thereof, could have a direct impact on their operations. 

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