HWG LLP AI & Emerging Technologies Alert

By: Austin Bonner, Jocelyn Aqua, and Alex Tate

On December 11, 2025, President Trump issued an executive order, Ensuring a National Policy Framework for Artificial Intelligence. The President has repeatedly expressed his support for federal preemption of state AI regulation, and the executive order directs the executive branch to take several actions to “check the most onerous and excessive laws emerging from the States that threaten to stymie [AI] innovation.” It also establishes a policy of U.S. “global AI dominance through a minimally burdensome national policy framework for AI.”

The executive order directs the executive branch to take the following actions:

  • AI Litigation Task Force. The Attorney General will establish an AI Litigation Task Force to challenge state AI laws inconsistent with the policy established by the executive order. The executive order suggests such laws could be challenged on the basis that they impermissibly regulate interstate commerce or are preempted by federal law.
  • Evaluation of State AI Laws. The Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) will publish an evaluation of state AI laws that identifies “onerous laws” inconsistent with the policy established by the executive order. NTIA will refer those laws to the AI Litigation Task Force. In particular, the evaluation must identify laws that “require AI models to alter their truthful outputs” or contain unconstitutional disclosure or reporting requirements.
  • Restrictions on State Funding. Within 90 days, NTIA will issue a policy notice stating that states with AI laws identified as onerous will not be eligible for non-deployment funding under the Broadband Equity Access and Deployment Program. Executive departments and agencies will also assess their discretionary grant programs to determine whether the grants can be conditioned on states either not enacting or not enforcing AI laws that are inconsistent with the policy established by the executive order.
  • Federal Reporting and Disclosure Standard Proceeding. Within 90 days, the Federal Communications Commission Chairman will “initiate a proceeding to determine whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.”
  • FTC Policy Statement. The Federal Trade Commission will issue a policy statement that explains when the Federal Trade Commission Act’s prohibition on deceptive acts or practices preempts state laws “that require alterations to the truthful outputs of AI models.” The executive order cites bans on algorithmic discrimination as examples of laws that “may . . . force AI models to produce false results.”
  • Legislative Recommendation. The Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology will recommend a legislative approach to establishing a national AI policy framework that preempts state AI laws that conflict with the policy established by the executive order. The executive order identifies several areas of state AI regulation that federal legislation should not preempt, including regulation related to children’s safety, AI compute and data center infrastructure, and government procurement.

While these actions may eventually eliminate some state-law compliance burdens, they do not have an immediate effect on existing state AI laws. Companies should not assume that the executive order relieves them from any state compliance obligations they have or will have in the near future, until additional actions are taken by states, Congress, and the Administration.

The executive order does not state what constitutes a “State AI law,” and although it contemplates exempting several topics from the scope of federal preemption, it is not clear how many and which state laws could be implicated. For instance, many state consumer data privacy laws impact the development and use of AI, specifically the use of personal information for automated decision making.

The executive order, and the actions it directs, are likely to be challenged in court. Many state officials have already expressed strong opposition to federal preemption of state AI regulation. After a draft of this executive order began circulating widely and as Congress was considering a version of the 2026 National Defense Authorization Act that contained a provision preempting state AI regulation, attorneys general from 36 states sent a letter to Congressional leadership urging them not to adopt broadly preemptive federal legislation, citing the role of states as agile regulatory testing grounds.

The executive order signals a clear preference for uniform AI regulation, but, as the list of actions outlined above demonstrates and the executive order acknowledges, work remains to be done to achieve that goal. If you’d like further guidance on how to approach AI governance and compliance issues in this fast-changing regulatory environment, please contact Austin Bonner or Jocelyn Aqua 

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HWG LLP’s cross-disciplinary Artificial Intelligence and Emerging Technologies practice advises clients on federal and state legislative and regulatory proceedings, company compliance, and related litigation matters. Please contact Austin Bonner for more information.

This advisory is not intended to convey legal advice. It is circulated publicly as a convenience and does not reflect or create an attorney-client relationship.