WASHINGTON, December 22, 2025 – President Donald Trump signed an executive order Monday directing federal agencies to challenge state-level artificial intelligence laws and withhold infrastructure funding from non-compliant states, seeking to impose a single national standard to accelerate U.S. AI development in competition with China.
The order empowers the attorney general to file lawsuits against states with regulations deemed obstructive to “United States’ global A.I. dominance.”
It also authorizes withholding federal broadband and other grants from jurisdictions maintaining such rules. Trump, during the signing, criticized the existing system: “We want to have one central source of approval.”
David Sacks, the administration’s AI and crypto policy adviser, defended the approach as necessary for efficiency. “You’ve got 50 states running in 50 different directions—it just doesn’t make sense,” Sacks said. He clarified exemptions for state laws on child safety, data center construction, or government AI procurement.
Critics labeled the move an overreach. Indiana State Rep. Matt Pierce (D-Bloomington) called it a favor to donors: “The president is trying to basically reward his donors by trying to block off this AI regulation.”
Cybersecurity expert Doug Kouns noted ambiguity: “It’s quite confusing—there’s a lot of ambiguity.” Indiana State Rep. Craig Haggard (R-Mooresville) objected to the funding threats but expected state protections to hold.
The order builds on Trump’s July AI directives, easing federal rules and promoting exports. Legal analysts predict challenges, as preemption typically requires congressional action under the Supremacy Clause.
As states prepare defenses, the policy could streamline industry compliance but risks weakening localized safeguards in a fast-evolving technology landscape.
