White House, Dec. 11, 2025, in Washington, D.C.: President Trump displays a signed EO as Republican Sen. Ted Cruz of Texas, Commerce Secretary Howard Lutnick and White House AI and crypto czar David Sacks look on. The order curbs states’ ability to regulate AI, something the tech industry has been lobbying for. (Photo by Alex Wong/Getty Images)

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President Trump signed an executive order Thursday that blocks state artificial intelligence laws, clearing the way for a single, national regulatory AI framework. Trump and his advisors expressed concern that a patchwork of state-level regulations could cripple the burgeoning AI industry, emphasizing the need for a unified approach to ensure America’s technological and economic superiority over China.

The executive order pits the administration against the states. During the announcement, David Sacks, the White House AI and crypto czar, said, “We have over a thousand bills going through state legislatures right now to regulate AI, over a hundred of them have already passed, 25% of them are in California, New York and Illinois.”

The debate between state AI regulations and a nationwide policy has been escalating for months. In July, the Senate stripped a controversial provision in the One Big Beautiful Bill that would have blocked state AI laws. In November, a leaked draft of the order drew criticism from civil society groups. Sacks, in a detailed post on X, defended one rulebook for AI previewing the “tools necessary for the federal government to push back against the most onerous and excessive state regulation.”

California Gov. Gavin Newsom had strong words in a press release reacting to the new executive order. “President Trump continued his ongoing grift in the White House, attempting to enrich himself and his associates, with a new executive order seeking to preempt state laws protecting Americans from unregulated AI technology,” he stated. “President Trump and Davis [sic] Sacks aren’t making policy — they’re running a con. And every day, they push the limits to see how far they can take it.”

Who Was In The Room With Trump?

The president was surrounded by some of his main advisors and political leaders. This was a redemption moment for Republican Senate Commerce Committee Chairman Ted Cruz of Texas, who has consistently advocated for a light touch regulatory strategy. During the Oval Office ceremony, Sen. Cruz framed the moment as “the single most important economic question in the country and in the world: who wins the race for AI.”

Treasury Secretary Scott Bessent called AI “the biggest technological innovation in our country’s history,” indicating the need to maintain it as “the single biggest source of economic growth.” He was flanked by Chamath Palihapitiya, Sacks’ business partner, venture capitalist and former Facebook executive.

Sacks, standing by the side of Commerce Secretary Howard Lutnick, was prompted by the president and stated that the administration plans to work with Congress to create a federal framework, and “in the meantime, this EO gives your administration tools to push back on the most onerous and excessive state regulations.”

The Details Behind Trump’s Preemption Strategy

The administration’s final AI executive order preserves the draft’s entire regulatory framework while adding a few strategic carve-outs. The two versions establish identical mechanisms: a 30-day Justice Department litigation task force, 90-day Commerce Department review of state laws and coordinated agency action through the Federal Communications Commission and Federal Trade Commission to preempt state regulations.

The core policy remains unchanged. Both documents explicitly target Colorado’s algorithmic discrimination law, which requires companies using high-risk AI to prevent discrimination and protect consumers’ rights, arguing it forces companies to alter AI outputs or violate constitutional protections. Both seek federal preemption on commerce clause grounds and threaten states with funding restrictions.

The critical additions appear in the final version’s carve-outs. The order now explicitly exempts state laws on child safety, AI infrastructure for data centers and government procurement from federal preemption. The Broadband Equity Access and Deployment funding restrictions narrowed, targeting only “non-deployment funds” rather than all remaining funding.

These changes suggest legal refinement rather than policy reversal. The administration preserved every enforcement mechanism from the draft while building defensive exceptions that could strengthen the order against inevitable constitutional challenges. The structural goal of federal dominance over AI regulation survived intact.

What’s Next For Trump, Congress And The States?

The administration will negotiate with Congress the creation of a federal AI framework, one central source of approval, as the president called it. Trump is assuming that he will have “great Republican support” and “probably have Democrat support, too, because it’s common sense.”

The executive order may finally force congressional action. Earlier this year, the proposal for a moratorium blocking state AI legislation did not gain support in the Senate and was unable to secure support from prominent MAGA leaders like Sen. Josh Hawley of Missouri, who considers a ban on state laws a “bad idea.” Two days before the announcement of the executive order, house Democratic leader Hakeem Jeffries of New York launched a House Democratic Commission on AI and the Innovation Economy to “develop policy expertise in partnership with the innovation community, relevant stakeholders and committees of jurisdiction.”

Addressing the patchwork of state AI legislation is a legitimate and necessary objective. Leaving that patchwork unresolved, however, without a credible federal alternative would be irresponsible. The moment calls for the administration, Republicans and Democrats in Congress to work together to establish clear national safeguards that protect the public and sustain innovation.

AI will shape economic growth, workforce transitions and social stability for decades. This debate is not going away. As the country moves toward the midterms and the next presidential election, AI policy will remain a focal point for lawmakers, industry and voters alike. Billions of dollars are already flowing into lobbying efforts to shape the outcome.

The challenge ahead is ensuring that political incentives do not crowd out thoughtful governance. The cost of delay or partisan stalemate would far exceed the cost of compromise. Whether President Trump and Congress follow with legislation or leave the fight to courts and agencies will determine how durable this approach becomes.