Updated 4:15 p.m. ET
The Trump administration is considering a new executive order that would punish states for enacting laws on artificial intelligence and potentially speed plans to enact a national AI framework.
The leaked copy of the draft document, obtained by Fierce Healthcare, lays out a plan to pursue legal action against states that try to regulate AI and a pathway to withhold grant funds for states that try to regulate AI.
It also requires administration officials to prepare a legislative recommendation for President Donald Trump on a national regulatory framework for AI that preempts state policy.
The six-page draft document is titled “Eliminating State Law Obstruction of National AI Policy." The draft EO does not contain any healthcare-specific provisions, but rather aims to constrain states from enacting or enforcing state AI laws, many of which also apply to the healthcare industry.
While the draft document is still subject to change, it calls on Attorney General Pam Bondi to create an AI litigation task force within 30 days, with the sole focus of challenging state AI laws on the grounds that they unconstitutionally regulate interstate commerce or are preempted by existing federal regulations.
It also proposes a review by the Secretary of Commerce of all state AI laws that are unlawful. The Commerce Secretary would also be required to issue a policy notice explaining that states with AI laws are ineligible for remaining broadband funding under the Broadband Equity Access and Deployment (BEAD) program.
BEAD funds national infrastructure projects, and the draft EO would require the Commerce Department to explain that a state patchwork of AI laws would impede BEAD-funded projects.
Further, the draft EO directs agencies to assess discretionary grant programs to determine whether they can condition grants on a state AI law ban.
Trump recently posted on Truth Social that he believes the country should have a federal standard for AI, not a state-by-state patchwork of laws, which has proliferated, especially in California, amid the federal government’s lack of action.
The draft EO notes that states have introduced more than a thousand AI bills that the Trump administration says undermine innovation and American leadership in AI. The draft order calls out California and Colorado for passing burdensome laws.
“Investment in AI is helping to make the U.S. Economy the “HOTTEST” in the World — But overregulation by the States is threatening to undermine this Growth Engine. Some States are even trying to embed DEI ideology into AI models, producing “Woke AI” (Remember Black George Washington?),” Trump posted on Truth Social on Tuesday evening. “We MUST have one Federal Standard instead of a patchwork of 50 State Regulatory Regimes. We can do this in a way that protects children AND prevents censorship!"
A moratorium on state AI laws was previously added as an amendment to Trump’s budget reconciliation bill by Senator Ted Cruz, R-TX. The amendment was eventually excised from the massive spending package by a vote of 99 to 1.
There was an effort to revive the state AI moratorium in the must-pass defense spending bill, the National Defense Authorization Act. A source close to the matter says that proposal is now off the table.