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Diving brief:
- U.S. companies must be prepared to navigate a “fluctuating and unstable regulatory landscape” following President Donald Trump’s recent executive order to block certain state-level artificial intelligence laws, according to a legal analysis.
- Critics such as the American Civil Liberties Union say the order raises constitutional questions. One section calls for states with “onerous” AI laws to be denied federal funds.
- “Given the legal uncertainty and potential challenges to the EO, it is important to note that existing state AI laws remain applicable,” attorneys with the Roanoke, Va.-based law firm Woods Rogers Vandeventer Black said in a blog post published Monday. “But it remains to be seen whether states will actually enforce their AI regulations as a result of the EO.”
Dive overview:
Trump’s order states that state AI laws “sometimes impermissibly regulate across state lines, encroaching on interstate commerce.”
Thursday’s order, which drew mixed reactions, directs U.S. Attorney General Pam Bondi to establish an AI litigation task force within 30 days to challenge state AI laws that “unconstitutionally regulate interstate commerce” or conflict with existing federal laws.
Within 90 days, Commerce Secretary Howard Lutnick must issue a policy specifying the conditions under which states may be eligible for remaining funding under the Broadband Access and Deployment Program. Under this policy, states with onerous AI laws should be considered ineligible.
The president also called on David Sacks, White House special adviser on AI and cryptography, and Michael Kratsios, assistant to the president for science and technology, to jointly recommend federal AI legislation that would preempt any state laws that conflict with administration policy.
“Until such a national standard exists, it is imperative that my administration take steps to audit the most onerous and excessive state laws that threaten to block innovation,” the order states.
The order opens a “Pandora’s box of not only constitutional questions, but also questions relating to the interpretation and scope of the EO,” according to Woods Rogers Vandeventer Black’s analysis.
“Does the President have the legal authority to issue such a broad AI order targeting state laws? Some constitutional scholars have argued that an executive order attempting to preempt state AI laws would violate state sovereignty under the anti-commandeering doctrine rooted in the Tenth Amendment,” the lawyers wrote.
In a statement denouncing the order, Cody Venzke, senior policy counsel at the ACLU, said the Supreme Court has made clear that a president “cannot unilaterally and retroactively change the terms of federal grants to states after the fact.”
“Each of these grants is an agreement between the states and the federal government, and threatening to withhold funds for schools, broadband development, nutritional support and more for political fights unrelated to AI will needlessly harm the American people,” he said.
The order also drew criticism from some lawmakers, including Sen. Amy Klobuchar (D-Minn.), who called it “dangerous and very likely illegal” in an article on X.
The president’s action was praised by business groups such as the American Chamber of Commerce.
“The Chamber commends President Trump for working to address the growing challenge posed by a patchwork of AI regulations at the state level,” Jordan Crenshaw, senior vice president of the Chamber’s Technology Engagement Center, said in a statement. “These fragmented state laws risk depriving small businesses and other startups of the tools they need to grow, innovate and compete. »
He said it’s also critical that Congress establish a federal AI framework to “provide the certainty and stability the business community needs to harness the full potential of artificial intelligence and give American companies an edge.”
