A new federal executive order aimed at halting state and local regulation of artificial intelligence, arguing that fragmented laws could undermine US competitiveness. The move raises significant questions for counties about federal preemption, state authority, and the future of locally driven AI safeguards.
A recent Ogletree Deakins article discusses last month’s federal executive order aimed at curbing state and local government regulation of artificial intelligence (AI). The Order asserts that a patchwork of state laws could hinder US competitiveness and innovation. The Order follows Congress’s decision to drop a proposed federal moratorium on state AI regulation and sets the stage for renewed federal-state tension over AI governance.
As previously covered by MACo, the US Senate, in bipartisan efforts, rejected a sweeping attempt to block state and local governments from regulating AI, reaffirming their authority to protect residents amid rapidly evolving technology.
The Executive Order, titled “Ensuring a National Policy Framework for Artificial Intelligence,” advances a federal strategy to establish a uniform, minimally burdensome national approach to AI. It directs multiple federal agencies to limit or deter state and local AI laws that the administration views as conflicting with federal priorities or constitutional principles.
The resulting framework must forbid State laws that conflict with the policy set forth in this order. Until such a national standard exists, however, it is imperative that my Administration takes action to check the most onerous and excessive laws emerging from the States that threaten to stymie innovation.
Key Provisions of the Executive Order laid out in the Ogletree Deakins article:
AI Litigation Task Force:
The Order directs the US Attorney General to establish a DOJ task force dedicated to challenging state AI laws in court, including on grounds of federal preemption, interstate commerce, or constitutional violations.
Federal Evaluation of State Laws:
The Secretary of Commerce must evaluate existing state AI laws within 90 days and identify those deemed “onerous,” particularly laws requiring altered AI outputs or extensive disclosures that may raise First Amendment concerns.
Funding Conditions and Restrictions:
Access to certain federal funds, including non-deployment funding under the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) Program, may be conditioned on a state’s AI regulatory posture, to the maximum extent allowed by law.
Preemption and National Standards:
The Order calls for legislative recommendations to establish a federal AI framework that expressly preempts conflicting state laws and directs agencies to explore national reporting, disclosure, and enforcement standards for AI.
The Order is expected to face legal pushback from states and localities that have already enacted AI laws addressing transparency, bias, privacy, discrimination, and public safety. According to the National Conference of State Legislatures, all 50 states and several territories considered AI legislation in 2025, underscoring the breadth of state involvement in this policy area.
