Trump Signs AI Preemption Order: DOJ Task Force to Challenge State Laws

December 12, 2025

December 2025 Update: President Trump signed an executive order on December 11 creating an AI Litigation Task Force to challenge state AI regulations. States face potential loss of $42.5B in broadband funding for non-compliance. Legal challenges expected immediately.

TL;DR

President Trump signed an executive order directing the DOJ to challenge state AI laws and threatening to withhold $42.5B in broadband funding from non-compliant states. The order faces near-certain legal defeat: executive orders cannot preempt state law without congressional authorization, and Congress rejected identical language in a 99-1 vote days earlier. Organizations should maintain full state law compliance while tracking DOJ Task Force formation and state attorney general challenges through 2026.

What Happened

President Donald Trump signed an executive order on December 11, 2025, titled "Eliminating State Law Obstruction of National Artificial Intelligence Policy," establishing a framework to override state-level AI regulations.¹

The order creates an AI Litigation Task Force within the Department of Justice, led by Attorney General Pam Bondi, with the "sole responsibility" of challenging state AI laws on grounds they "unconstitutionally regulate interstate commerce" or conflict with federal policy.²

"There must be only One Rulebook if we are going to continue to lead in AI," Trump posted on Truth Social before signing.³ At the signing ceremony, Trump argued that requiring "50 different approvals from 50 different states" would drive AI companies away from the United States.

David Sacks, Trump's AI and crypto czar, and tech investor Chamath Palihapitiya stood beside Trump during the signing.⁴ The order follows two congressional defeats—Senators stripped similar preemption language from both the defense policy bill and budget bill, the latter in a 99-1 vote.⁵

Why It Matters for Infrastructure

The executive order creates immediate compliance uncertainty for organizations deploying AI systems:

State Law Status Unclear: Laws like Colorado's AI Act (CAIA), which requires algorithmic discrimination impact assessments and consumer notification for adverse AI decisions, now face federal challenge.⁶ Companies that invested in compliance infrastructure face potential stranded costs if these laws are invalidated.

Data Center Exemption: The order explicitly exempts state laws regarding "AI compute/data center infrastructure" from preemption.⁷ States retain authority over data center siting, power agreements, and operational requirements. The exemption protects existing infrastructure investments.

Broadband Funding Leverage: Within 90 days, the Commerce Department must specify conditions under which states remain eligible for the $42.5 billion Broadband Equity Access and Deployment (BEAD) program.⁸ States with AI regulations deemed non-compliant risk losing critical connectivity funding. For context: Virginia alone stands to receive $1.5B, Texas $3.3B, and California $1.9B under BEAD. Governors face pressure to weaken AI protections to secure these allocations.

Enterprise Compliance Complexity: Organizations must now track both existing state requirements and federal challenges to those requirements. The 30-day window for Task Force establishment means litigation could begin in January 2026.

Technical Details: What the Order Does

Immediate Actions (30 Days)

AI Litigation Task Force: Attorney General establishes dedicated unit to identify and challenge state AI laws. Challenges will argue interstate commerce violations, federal preemption, or other legal grounds.⁹

90-Day Deadlines

Explicit Exemptions

The order cannot preempt state laws addressing:¹⁰ - Child safety protections - AI compute and data center infrastructure - State government AI procurement and use

Target: Algorithmic Discrimination Laws

The order specifically targets state requirements that AI systems avoid "differential treatment or impact" on protected groups, characterizing such requirements as forcing AI to produce "false results."¹¹

State Laws at Risk

Colorado's CAIA appears directly in the crosshairs, imposing a duty of care against algorithmic discrimination.¹²

Legal Landscape

Why Courts Will Likely Block This: The Constitution's Supremacy Clause allows federal law to preempt state law, but only when Congress acts. Executive orders lack this authority. The Supreme Court held in Youngstown Sheet & Tube Co. v. Sawyer (1952) that presidents cannot seize powers Congress has not delegated. Since Congress explicitly rejected AI preemption language in a 99-1 vote just days before this order, courts have strong grounds to invalidate it.¹³

Constitutional Questions: Legal experts argue executive orders cannot preempt state law without congressional authorization. "This will hit a brick wall in the courts," said Brad Carson, president of Americans for Responsible Innovation.¹³

State Response: Fourteen states introduced AI-specific legislation by February 2025, with Colorado, Texas, and California leading divergent regulatory approaches.¹⁴ State attorneys general are expected to challenge the order's constitutionality.

Republican Division: The order splits Trump's coalition. Utah Governor Spencer Cox posted that he preferred an alternative order "that did not include barring state laws," writing "States must help protect children and families."¹⁵ Conservative policy groups criticized the move as a "giveaway to AI companies at the expense of states' rights."¹⁶

Industry Support: OpenAI, Google, and Andreessen Horowitz lobbied for state law limitations, arguing fragmented regulation threatens U.S. competitiveness.¹⁷

What's Next

January 2026: AI Litigation Task Force becomes operational; first legal challenges to state laws possible.

March 2026: Commerce Department BEAD funding conditions finalized; states learn if their AI laws affect broadband eligibility.

June 2026: Colorado AI Act's delayed implementation date—may be moot if federal challenges succeed.

Court Battles: Expect multi-year litigation over federal preemption authority. The Supreme Court may ultimately decide whether executive action can override state consumer protection laws without legislation.

Organizations should maintain compliance with existing state requirements until courts rule, while monitoring Task Force actions for early signals on which laws face challenge.

Key Takeaways

For compliance teams: - Continue full compliance with state AI laws until courts rule; no enforcement pause exists - Track DOJ AI Litigation Task Force announcements via Federal Register and justice.gov - Document compliance investments now to support potential cost recovery claims later - Data center infrastructure regulations explicitly exempted from federal preemption - Monitor Colorado AG and California AG offices for state challenge filings

For infrastructure planners: - Data center siting, power, and operational requirements unaffected by the order - $42.5B BEAD broadband funding conditions finalize March 2026; track Commerce Department guidance - No immediate changes to infrastructure permitting processes - States may accelerate data center-specific regulations before federal rules solidify

For strategic planning: - Budget for 2-4 years of legal uncertainty; maintain compliance with both federal and state frameworks - Federal-state regulatory fragmentation likely increases before it decreases - Key dates: January 2026 (Task Force launch), March 2026 (BEAD conditions), June 2026 (Colorado CAIA) - Constitutional challenge success probable given Youngstown precedent and 99-1 congressional vote

References

For AI infrastructure deployment support across regulatory environments, contact Introl.