In a controversial move orchestrated by 'AI Czar' David Sacks, the White House attempts to override state regulations via executive order, triggering a constitutional and political showdown.
WASHINGTON, D.C. - In a decisive move that reshapes the landscape of American technology policy, President Donald Trump has signed an executive order aimed at preempting state-level artificial intelligence regulations. The order, signed late last week, represents the culmination of an aggressive campaign by venture capitalist and "AI and Crypto Czar" David Sacks to establish a single federal standard, effectively nullifying the patchwork of stricter laws emerging from states like California and New York.
The executive action directs federal agencies, specifically the FCC and FTC, to initiate proceedings that would override conflicting state laws. It marks a significant escalation in the battle over who controls the future of AI: the federal government, driven by industry demands for speed and innovation, or state legislatures focused on safety and consumer protection. The move has ignited immediate backlash not only from Democratic governors like Gavin Newsom but also from within the President's own party, exposing a deep rift over the principles of federalism.
Table of contents [Show]
The logic behind the order is clear: fragmentation is the enemy of progress. Speaking alongside the President, David Sacks argued that the United States cannot maintain its lead in the global AI race if domestic companies are forced to navigate fifty different regulatory environments.
"We are beating ALL COUNTRIES at this point in the race, but that won't last long if we are going to have 50 States, many of them bad actors, involved in RULES and the APPROVAL PROCESS. THERE CAN BE NO DOUBT ABOUT THIS! AI WILL BE DESTROYED IN ITS INFANCY!" - President Donald Trump, via Truth Social
According to reports from FedScoop and CNBC, the order tasks Sacks and the Office of Science and Technology Policy with drafting legislative recommendations for Congress to cement this preemption into statutory law. Furthermore, leaked drafts cited by The Verge suggest the administration considered punitive measures, such as withholding federal funding from non-compliant states-a tactic that extends beyond rural broadband grants to potentially broader financial levers.
The strategy relies on using federal agency authority to displace state laws. Ropes & Gray LLP notes that the order directs the FCC Chairman, in consultation with Sacks, to determine whether a federal reporting and disclosure standard should be adopted. If adopted, this federal standard would theoretically supersede conflicting state mandates under the supremacy clause, though legal experts warn this is testing the limits of executive power without explicit Congressional authorization.
Sacks has publicly defended the approach as a necessary clarification of jurisdiction rather than a total moratorium on regulation. "This is not an 'AI amnesty'," Sacks posted on X (formerly Twitter). He emphasized that while child safety measures would be protected, the administration intends to push back on "onerous and excessive" regulations that stifle development.
California Governor Gavin Newsom has been vocal in his opposition. California has been at the forefront of AI safety legislation, filling the vacuum left by federal inaction. Mike Kubzansky, CEO of the Omidyar Network, described the federal preemption attempt as an "abdication of what elected officials owe their constituents," arguing that a blanket moratorium ignores the real-world impacts of AI deployment on local communities.
Perhaps the most surprising resistance comes from the right. The Republican party has traditionally championed states' rights, and this top-down federal mandate sits uneasily with that core tenet. Florida Governor Ron DeSantis, a former primary rival, has consistently criticized federal efforts to curtail state regulatory power.
Even staunch MAGA allies are voicing concern. Steve Bannon, speaking to Axios, offered a scathing critique of the "AI Czar," stating that Sacks had "completely misled the President on preemption" after failing to jam "AI Amnesty" into legislative bills. This highlights a growing friction between the populist wing of the GOP and the Silicon Valley-aligned faction represented by Sacks and Elon Musk.
For Big Tech, the executive order offers a glimmer of hope for a unified market. Companies developing large language models prefer a single federal framework over navigating 50 unique compliance regimes. However, the legal uncertainty surrounding the order may temper this optimism.
According to analysis from Law-AI.org, creating preemption through agency rulemaking is legally precarious. If the courts determine that the executive branch is overstepping its authority by effectively legislating through the FCC or FTC, the order could be stayed or struck down. This would leave tech companies in a prolonged state of limbo, potentially facing the very patchwork of laws the administration seeks to avoid, but with added confusion.
The signing of the executive order is merely the opening salvo. The next phase involves the cumbersome machinery of federal rulemaking. The FCC and FTC must now draft the specific rules mandated by the order, a process that requires public comment and is subject to judicial review. Meanwhile, the directive for Sacks to draft legislation signals an acknowledgement that executive action alone may not be durable.
As legal challenges from attorneys general in blue states inevitably mount, the Supreme Court may eventually be asked to decide the balance between federal commerce powers and state police powers in the digital age. Until then, the tension between Washington's desire for AI supremacy and the states' demand for safety will define the regulatory environment for years to come.
An Indian tech CEO shares insights from 25 years of experience, arguing that AI is an amplifier, not a replacement. The article explores 10 real-world case studies where human empathy, creativity, and strategic thinking remain irreplaceable in business and society.
An Indian tech CEO argues that AI is an amplifier, not a replacement for humans. The article explores 10 real-world case studies, from medicine to leadership, where human empathy, creativity, and strategic thinking remain fundamentally superior to algorithms.
An in-depth look at why AI is a tool for human augmentation, not replacement. This article explores 10 case studies where human skills like empathy, strategic thinking, and ethical judgment remain superior, arguing for a future built on human-AI collaboration.
