White House crafting executive order to thwart state AI laws
US President Donald Trump makes a statement about artificial intelligence at the “Winning the Artificial Intelligence Race” Summit held on July 23, 2025 in Washington DC, USA.
Kent Nishimura | Reuters
An executive order that could soon be signed by President Donald Trump would block state AI laws by launching legal challenges and cutting off federal funding, according to a report. order draft Obtained by CNBC on Wednesday.
The draft appeared shortly after Trump openly called A single federal standard on AI “rather than a patchwork of 50 State Regulatory Regimes.”
The draft order would give Attorney General Pam Bondi 30 days to establish an “AI Litigation Task Force” whose sole mission is to challenge AI laws in the state.
The bill states that these challenges would be filed “on the grounds that such laws unconstitutionally regulate interstate commerce, are precluded by existing Federal regulations, or are unlawful in the judgment of the Attorney General.”
The order also directs Commerce Secretary Howard Lutnick to notify states with controversial AI laws that they are ineligible for funds under the federal Broadband Capital Access and Deployment program. BEAD A More than $42 billion Program that allocates funds to all states and territories of the United States.
Order reported for the first time Informationhas not been finalized yet. A White House official told CNBC that any discussion of the issue is merely speculation until it is officially announced.
As written, the EO would be a big win for the burgeoning AI industry, whose leaders including Sam Altman’s OpenAI, venture capital firm Andreessen Horowitz and other Silicon Valley giants have railed against an inconsistent state-by-state policy approach.
It would be an equally big blow to state lawmakers across the country who are trying to pass bills that would put guardrails on the emerging technology.
In a statement to CNBC, New York State Assemblyman Alex Bores, who co-sponsored the state AI security bill, called the draft EO “a blank check to Donald Trump’s tech billionaire backers, who have already made a fortune allowing unrestricted AI to eliminate jobs, destroy our children’s brains, and send electric bills through the roof, and are now poised to make exponentially more profits.”
Bores, a Democrat running for Congress, this week became the first target of a well-funded super PAC backed by AI industry leaders.
GOP weighs AI moratorium
The White House is also working with a group of Republican lawmakers to see whether a moratorium on certain state AI laws could be included in one of the major bills Congress is working on.
That language is still in draft form, but it would likely hinder states’ ability to regulate issues such as how artificial intelligence is developed, according to four sources familiar with the discussions. States may also create policies on other AI-related issues, such as fraud, consumer protection and images depicting child sexual abuse, the sources said.
a recommended one 10 year ban Legislation for states regulating artificial intelligence was originally included in Republicans’ “big, beautiful bill” but was cut before Trump signed it in July.
The current draft proposal may not have an expiration date, one source familiar with the discussions said.
“You’re seeing China moving very aggressively,” House Majority Leader Steve Scalise, R-La., told CNBC on Tuesday. “Artificial intelligence is the wave of the future, but we want America to dominate it and our policies to reflect that.”
Even those who support state-level action for new federal AI policy have bipartisan support.
“Let’s be clear: we need a federal solution. But we need a solution crafted by experts and not selling you out to the highest bidder. Until then, states must act,” Bores said. said in an X post Thursday.
But there is also bipartisan opposition to excluding states.
“There should be no moratorium on state AI rights,” said Rep. Marjorie Taylor Green, R-Ga. wrote to x. “States should retain the right to regulate and legislate AI and anything else for the benefit of their own state.”
House Minority Leader Hakeem Jeffries (DY) also rejected the idea of a state-level AI moratorium.
“This provision doesn’t seem to have a lot of support among Democrats and Republicans in Congress,” he told CNBC in a brief hallway interview. “So I don’t know why Donald Trump is bringing this up again.”
Sen. Mark Warner, D-Va., said Thursday morning on CNBC’s “Squawk Box” that he is open to a single national primary. But it would be a mistake to prevent states from taking action until they are ready.
“If we take away the pressure from the states, Congress will never act,” Warner said. “Let’s look at the fact that we haven’t done anything on social media. If we do the same reaction to artificial intelligence and don’t put guardrails, I think we will.” [to] “I regret it.”
— CNBC’s Kevin Breuninger contributed to this report.
