President Signs Executive Order to Limit State Regulation of Artificial Intelligence

On December 11, 2025, President Trump signed an executive order purporting to limit the ability of states to regulate the use of artificial intelligence (AI). The order’s stated purpose is to ensure that American AI companies are “free to innovate without cumbersome regulation” and to “remove barriers to American AI leadership.” The order cites the proliferation of AI legislative proposals in state legislatures as undermining that goal (although it bears note that few if any of these proposals have or are likely to become law).

The order specifically cites as problematic a recently enacted California state law, which it claims requires “complex and burdensome disclosure… based on the purely speculative suspicion that AI might ‘pose significant catastrophic risk.’” It further references Colorado state law regarding algorithmic discrimination, claiming that that law “may even force AI models to embed DEI in their programming.” The order goes on to state that the administration will act to adopt a “minimally burdensome national standard” rather than let state regulations proliferate.

As a matter of substance, the order first establishes within the Department of Justice an “AI Litigation Task Force” charged with challenging state AI laws on the grounds that they are unconstitutional regulations of commerce, preempted by federal regulations, or otherwise unlawful. It then directs the commerce secretary to publish an evaluation of state laws that are in conflict with the policies embodied in the order, including laws that should be referred to the DOJ Litigation Task Force. It specifically directs that review to identify laws that “require AI models to alter their truthful outputs” and laws that compel developers or users to disclose information in a manner that might violate the First Amendment (presumably an allusion to DEI concepts) or other provisions of the Constitution.

The order directs the Commerce Department to adopt a policy halting any remaining funding under the Broadband Equity Access and Deployment Act (which provides federal grants to states to connect all Americans to high-speed internet) to states that have laws in conflict with the order, and directs all federal agencies to examine discretionary grant programs to determine if they may condition such grants on states either not enacting AI laws in conflict with the order, or where such laws have already been enacted, entering into a binding agreement that such laws will not be enforced. 

The order calls upon the Federal Communications Commission to determine whether the federal government should adopt a federal reporting and disclosure standard that preempts conflicting laws.  Finally, it directs the Federal Trade Commission to adopt a policy statement explaining how state laws that require alterations to truthful outputs of AI models are preempted by federal law prohibiting deceptive acts or practices that affect commerce, and calls on the White House Office of Legislative Affairs to prepare a legislative recommendation for a uniform national framework to regulate AI and preempt state law in conflict with the order.

It remains unclear how quickly and completely the administration will move forward on the directives embodied in the order – we have previously seen the White House issue sweeping executive orders directing the government to do certain things, but executive agencies not moving forward with those directives in a timely manner. It is also highly likely that the order will be challenged by states that have adopted AI regulation as an unconstitutional encroachment of federal authority on states’ rights. Littler’s WPI will keep readers informed of developments; in the interim, employers—particularly those in states that have adopted laws regulating AI—should make every effort to stay current as to the status of those laws.