New Executive Order Targets State AI Regulations

On December 11, 2025, President Donald Trump issued an executive order (EO) titled Ensuring a National Policy Framework for Artificial Intelligence. The EO aims to restrict states from implementing their own laws and regulations regarding the use and development of artificial intelligence (AI).

Background

Recently, several states have enacted laws regulating AI use, including in employment decisions. States such as California, Illinois, Texas, and Colorado now restrict the use of AI that leads to discrimination based on protected traits. At the same time, a recent attempt in Congress to prevent states from passing their own AI regulations did not pass.

Key Highlights

The EO asserts that overly strict state rules hinder AI innovation, complicate compliance, introduce ideological bias into AI models, and burden interstate commerce. It declares a goal of global AI leadership through a minimally burdensome national standard and, to that end, directs federal agencies to:

• The establishment of an AI Litigation Task Force within 30 days of the EO to challenge state AI laws inconsistent with such policy;
• Within 90 days of the EO, the Secretary of Commerce must publish an evaluation of state laws that conflict with this policy;
• Directs the Secretary of Commerce, within 90 days of the EO, to issue funding eligibility rules for states under the Broadband Equity Access and Deployment Program and to halt funding to states with overly restrictive AI laws;
• The Federal Communications Commission, within 90 days of the secretary of Commerce’s publication of its state law evaluation, to determine whether to adopt a federal reporting and disclosure standard for AI models that preempts state laws;
• The Federal Trade Commission to clarify, within 90 days of the EO, when state laws that require changing truthful AI outputs are preempted by the federal ban on deceptive acts or practices in commerce; and
• A recommendation for federal AI legislation that clearly preempts conflicting state AI laws.

Employer Takeaways

Employers, particularly those in states with laws regulating AI in the workplace, should prepare for uncertainty following the EO. The EO is likely to face legal challenges by states with existing AI legislation who may argue that it’s an infringement on states’ rights. Therefore, employers should monitor the status of applicable state AI laws and further federal actions. Download the bulletin for more details.