The Trump Administration has issued an Executive Order titled “Ensuring a National Policy Framework for Artificial Intelligence.” The EO signals a shift toward federal preemption in AI regulation, aiming to establish a “minimally burdensome national standard” and check the emergence of diverse, potentially conflicting state laws.
The Administration asserts that the current state-by-state regulatory “patchwork” stymies innovation, complicates compliance for startups, and risks embedding ideological bias into AI models. For instance, the EO specifically references a Colorado law banning “algorithmic discrimination,” suggesting it may force AI models to produce false results to avoid a disparate impact on protected groups.
Within 30 days, the Attorney General is tasked with establishing an AI Litigation Task Force solely responsible for challenging inconsistent state AI laws on grounds including unconstitutional regulation of interstate commerce or federal preemption. Simultaneously, the Secretary of Commerce must, within 90 days, publish an Evaluation of State AI Laws identifying “onerous laws that conflict” with the national policy.
Employers should anticipate that existing or proposed laws, especially those involving mandatory auditing, broad algorithmic discrimination bans, or required disclosures, will be the primary targets for this evaluation and subsequent legal action by the Task Force. While these state laws remain enforceable for now, employers should prepare for a successful federal challenge and preemption, which would likely invalidate prescriptive requirements (like bias testing or specific disclosures) that the Administration deems burdensome or compelled speech.
The EO introduces significant financial and regulatory pressure to secure state compliance. Additionally, the Administration is moving to establish federal standards that will explicitly preempt state requirements. Within 90 days, both the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) are directed to initiate proceedings on federal preemption.