Executive Order Lays Groundwork for National AI Regulatory Framework

President Donald Trump signed an executive order Thursday, Dec. 11, designed to limit states from passing regulations on artificial intelligence (AI). Additionally, the order states that the Trump administration will work with Congress to develop and implement a framework that establishes a minimally burdensome national standard for regulating AI.

Business advocacy groups and trade associations praised the order, pointing out that it would prevent the propagation of individual state rules that may be overly restrictive or conflict with one another. Business groups, including the National Association of Wholesaler-Distributors (NAW), have warned that such an approach would result in a complex patchwork of regulations that slows the development of AI technologies and solutions.

“NAW has long advocated for federal leadership on AI policy that fosters innovation while minimizing inconsistent, burdensome requirements that can impede wholesaler-distributors' ability to deploy new technology in an efficient, responsible manner,” NAW said in a statement. “This executive order reinforces that approach by directing federal agencies to review state-level AI regulations and, where necessary, take steps to prevent overly restrictive or conflicting frameworks from undermining interstate commerce and national competitiveness.”

States that refuse to adhere to the executive order within 90 days could lose federal funding from the Broadband Equity Access and Deployment program, a $42.5 billion initiative that expands high-speed internet to rural areas. Agencies and departments that are part of the executive branch could also revoke discretionary grants to states that do not comply with the executive order.

Under the executive order, the attorney general will establish an AI Litigation Task Force that will be responsible for challenging state laws that are inconsistent with the Trump administration’s policy for one national AI framework. The legislation that creates that framework will be developed jointly by David Sacks, the administration’s special adviser for AI and cryptocurrency, and Michael Kratsios, the administration’s chief science and technology adviser.

Following the executive order, business groups, including the U.S. Chamber of Commerce, urged Congress to follow through on the passage of a national framework for AI. “It is also essential that Congress act to establish a federal AI framework to make permanent a clear, consistent national policy to deliver the certainty and stability the business community needs to harness the full potential of artificial intelligence and give American businesses an edge,” said Jordan Crenshaw, senior vice president of the U.S. Chamber’s Technology Engagement Center. “We look forward to working with the administration and Congress to ensure AI works for American small businesses.”