According to Forbes, a leaked draft executive order reveals the Trump administration is preparing to challenge state AI laws as unconstitutional through multiple aggressive tactics. The order would create a DOJ AI litigation task force specifically to sue states over AI regulations that affect interstate commerce, targeting existing laws in California, Colorado, and Illinois. It directs the Commerce Department to identify state laws requiring what the administration calls “woke” model outputs or compelled disclosures, then refer them to the DOJ for legal action. Federal agencies would condition discretionary grants on states refraining from enacting or enforcing conflicting AI laws during funding years. The order also tasks David Sacks, special advisor for AI and crypto, and James Braid, director of legislative affairs, with drafting federal AI legislation while the FCC and FTC would create national standards to preempt state rules.
Political backdrop
Here’s the thing: this isn’t coming out of nowhere. The administration’s July AI Action Plan already laid the groundwork for what they’re calling an “accelerationist” vision – basically, move fast and don’t let regulations get in the way. They see AI development as a geopolitical race where any friction could mean losing to China or other global rivals.
But there’s significant Republican opposition to this approach, which is fascinating. Senator Josh Hawley recently stated that “as a republican who believes in federalism I think it’s a strange argument for some republicans to make in this building that all of a sudden we should say to the states ‘no actually you shouldn’t do anything.'” That tension between federal power and states’ rights is creating some really unusual political alliances.
Industry divide
Not everyone in tech is cheering this move. The Silicon Valley venture community loves the accelerationist approach – they want minimal friction. But traditional enterprise companies like Microsoft and IBM are taking a more nuanced position. They’ve emphasized that trust and accountability are actually essential for widespread adoption. Microsoft’s AI Action Plan input stressed strong standards, while IBM called for clear roles and controls on high-risk uses.
Then there’s Anthropic, which has become one of the most vocal safety advocates. David Sacks publicly accused them of carrying out a “sophisticated regulatory capture strategy based on fear-mongering.” That’s some pretty strong language, and it shows how deeply divided the industry really is on this issue.
Constitutional battle
If this order gets signed, we’re looking at the most aggressive federal intervention into state tech regulation in decades. The administration is essentially using the Commerce Clause argument – that state laws regulating AI interfere with interstate commerce – to justify sweeping federal preemption. But states have traditionally had broad authority to regulate business practices within their borders.
The DOJ task force would immediately target laws like California’s Transparency in Frontier Artificial Intelligence Act, Colorado’s employment AI regulations, and Illinois’ algorithmic accountability measures. We’d see immediate legal challenges, and honestly, the courts have been all over the place on these federalism questions recently. It could take years to resolve.
What’s missing
Here’s what worries me about this approach: it’s creating a policy vacuum. By blocking state action without putting a comprehensive federal framework in place, we’re left with nothing. Some experts are pointing to alternative governance models like dynamic oversight and independent verification organizations that could help build trust without stifling innovation.
The administration’s move should really light a fire under Congress to actually do their job and pass proper AI legislation. But let’s be real – Congress has shown zero appetite to tackle this complex issue. So we’re left with executive action that’s likely to get tied up in courts for years while AI development races ahead. Not exactly the stable framework that markets need to avoid boom-and-bust cycles.
Ultimately, this executive order represents a massive power grab that could reshape federal-state relations in tech regulation for a generation. Whether that’s good or bad depends on your perspective, but one thing’s certain: the collision between Washington and state capitals over AI is coming, and it’s going to be messy.
