On December 11, 2025, the White House issued an Executive Order titled “Ensuring a National Policy Framework for Artificial Intelligence.”  This EO aims to establish a uniform and “minimally burdensome” Federal standard for AI regulation, including by directing the development of a federal legislative recommendation to preempt the current patchwork of varying state AI laws, except in a few discrete areas: “(i) child safety protections; (ii) AI compute and data center infrastructure, other than generally applicable permitting reforms; (iii) State government procurement and use of AI; and (iv) other topics as shall be determined.”  It follows President Trump’s EO 14179 (“Removing Barriers to American Leadership in Artificial Intelligence,” dated January 23, 2025), which mandated the development of a Federal AI action plan to further enhance “America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security” and the House’s failed attempt to include a state AI legislation moratorium in the One Big Beautiful Bill.  Last month, a draft version of this EO, titled “Eliminating State Law Obstruction of National AI Policy,” appeared to have been leaked.  That version, by contrast, while similar in overall substance, had no carveouts for the proposed preemption of state AI laws in the legislative recommendation.       

Summary of December 11, 2025 EO

• Purpose & Policy (Secs. 1 & 2): The final EO establishes a policy of a minimally burdensome national AI framework to enhance the U.S.’s global AI dominance. It cites the decentralized state AI laws as a challenge for AI companies, particularly, start-ups, by “requiring entities to embed ideological bias within models” and “impermissibly regulat[ing] beyond borders, impinging on interstate commerce.”  Compared to the draft EO, the final version emphasizes the goals of protecting children, preventing censorship, respecting copyrights, and safeguarding communities.  While the draft version mentions both Colorado’s and California’s AI laws as potentially at odds with the EO’s policy, the final version notes only Colorado’s ban on “algorithmic discrimination.” Neither the draft nor the final EO references Texas’s comprehensive AI law.
• AI Litigation Task Force (Sec. 3): Within 30 days, the Attorney General must establish an AI Litigation Task Force with the sole responsibility for challenging state AI laws that are deemed inconsistent with the EO’s policy because they are unconstitutional, preempted by existing Federal regulations, or otherwise unlawful.
• Evaluation of State AI Laws (Sec. 4): Within 90 days, the Secretary of Commerce (in consultation with the Special Advisor for AI and Crypto, the Assistant to the President for Economic Policy, the Assistant to the President for Science and Technology, and the Assistant to the President and Counsel to the President) must publish an evaluation of existing state AI laws that may conflict with the EO’s policy, including, “laws that require AI models to alter their truthful outputs, or that may compel AI developers or deployers to disclose or report information in a manner that would violate the First Amendment or any other provision of the Constitution.”  The EO acknowledges that through such evaluation, the Secretary may also identify state AI laws that promote AI innovation.  
• Funding Restrictions (Sec. 5): Within 90 days, the Secretary of Commerce must issue a “Policy Notice” that specifies eligibility criteria for remaining funding under the Broadband Equity Access and Deployment (BEAD) Program and to identify those states that are ineligible for such funds because they have been determined to have conflicting AI laws. The EO further directs executive departments and agencies to consider whether they may condition their own state funding grants on states either not enacting laws that conflict with the EO or entering a binding agreement not to enforce conflicting laws while they receive such grant funding.
• Potential Federal Reporting and Disclosure Standard (Sec. 6): Within 90 days of the Secretary of Commerce’s publication of its evaluation of state AI laws, the Chairman of the Federal Communications Commission (in consultation with the Special Advisor for AI and Crypto) must initiate a proceeding “to determine whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.”
• State Preemption & Federal Legislative Framework (Secs. 7 & 8): Within 90 days, the Chairman of the Federal Trade Commission (in consultation with the Special Advisor for AI and Crypto) must issue a policy statement on the application of the FTC Act’s prohibition on unfair and deceptive acts or practices (15 U.S.C. § 45) to AI models, including an explanation of the “circumstances under which State laws that require alterations to the truthful outputs of AI models” are preempted. In addition, without specifying a deadline, the EO directs the Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology to jointly prepare a recommendation for a Federal AI legislative framework that preempts state AI laws that have been determined to conflict with the EO’s policy.  In contrast to the draft EO, the final EO excludes from the preemption proposal those otherwise lawful state AI laws relating to “(i) child safety protections; (ii) AI compute and data center infrastructure, other than generally applicable permitting reforms; (iii) State government procurement and use of AI; and (iv) other topics as shall be determined.”

Key Takeaways

• The forthcoming AI Litigation Task Force is directed to challenge state AI laws that unconstitutionally regulate interstate commerce, are preempted by existing Federal regulations, or are otherwise unlawful; however, it remains unclear which of these grounds the Attorney General and the AI Litigation Task Force will opt to pursue and whether this new directive represents a significant litigation risk for states.  This is particularly true on the preemption front because, as the EO itself acknowledges, Congress has yet to promulgate a national framework for AI regulation, and, absent an applicable federal preemption standard adopted by Congress, states have traditionally retained the power to regulate unfair and deceptive activities in or affecting their jurisdiction, even if those activities involve interstate commerce.
• While the general litigation risk remains uncertain, the EO does make it clear that state AI laws relating to child safety protections, AI compute and data center infrastructure, and state government procurement and use of AI will not be subject to a preemption challenge.  Thus, state laws and regulations specifically tailored to those areas are unlikely to face pushback from the Administration.  The EO also leaves open the possibility that there are other unnamed AI-related topics that the Administration may leave to the states to freely regulate, which affords it some flexibility as it is considering potential avenues for challenging state AI laws. 
• For now, the status quo is unchanged.  Companies should continue to prioritize building robust AI governance structures that incorporate industry standard best practices (e.g., the NIST AI Risk Management Framework) and comply with applicable jurisdiction-specific requirements.