The Trump Administration wants to ensure that the development of artificial intelligence (AI) is regulated at the federal level and not by individual states. While Republicans tend to give states broad leeway in governance, the current Administration fears a fragmented approach to AI development will undermine global competitiveness in this key aspect of emerging technology.
Yesterday, President Donald Trump issued an Executive Order (EO) titled Ensuring a National Policy Framework for Artificial Intelligence.
The EO stated:
“To win, United States AI companies must be free to innovate without cumbersome regulation. But excessive State regulation thwarts this imperative. First, State-by-State regulation by definition creates a patchwork of 50 different regulatory regimes that makes compliance more challenging, particularly for start-ups. Second, State laws are increasingly responsible for requiring entities to embed ideological bias within models. For example, a new Colorado law banning “algorithmic discrimination” may even force AI models to produce false results in order to avoid a “differential treatment or impact” on protected groups. Third, State laws sometimes impermissibly regulate beyond State borders, impinging on interstate commerce.”
Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan issued the following statement on the AI EO. Kerrigan declared:
“Small businesses are greatly benefiting from AI tools, which they are rapidly adopting to improve productivity, efficiency, sales growth and the customer experience. Moreover, AI adoption has boosted workplace satisfaction, as employees are using these tools to eliminate mundane tasks and add greater value to business growth. A potential patchwork of complex rules that clash, or prescriptively regulate AI, not only undermine the adoption and use of these widely used tools, but will curtail investment in new innovations that are being developed by entrepreneurs. President Trump’s executive order is an appropriate response to unwarranted regulatory activism, especially in states that routinely burden small businesses with a steady stream of new taxes and rules, and where AI is being used as a strategy by these businesses to survive and maintain competitiveness with firms located in states with more favorable business environments. A federal framework for AI makes absolute sense, and we look forward to engaging with the Administration snd Congress to ensure the views of entrepreneurs and small business owners are considered in its development.”
While the EO is supported by the AI industry, who fear dealing with 50 different jurisdictions, Florida is pursuing an “AI Bill of Rights,” and several other states, like Texas and Utah, are doing the same. California has several laws that go into effect on January 1, 2026. The Artificial Intelligence Policy Act, in Utah, went into effect on May 1, 2024.
The disagreement between these states and the Fed may come down to an act of Congress.
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