White House considers order to preempt state AI laws

U.S. President Donald Trump arrives to welcome Crown Prince and Prime Minister Mohammed bin Salman of Saudi Arabia to the White House on November 18, 2025 in Washington, DC. Andrew Harnik/Getty Images

President Donald Trump is weighing an executive order that would disincentivize states from passing any new artificial intelligence regulations by withholding federal funding from noncompliant states. 

In a circulated draft of the order — titled “Eliminating State Law Obstruction of National AI Policy” — Trump stresses his administration’s light-touch regulatory preference, saying U.S.-made AI products need an industry-friendly environment to lead globally, and having “50 discordant” state laws governing these technologies will hinder this mission.

“American AI companies must be free to innovate without cumbersome regulation,” the draft order reads. “But State legislatures have introduced over 1,000 AI bills that threaten to undermine that innovative culture.”

Notably, the order would restrict various federal funding ...