President Trump Issues Executive Order to Limit State AI Laws

Once again signaling his commitment to advance artificial intelligence (AI) in the U.S., President Trump issued an Executive Order titled “Ensuring a National Policy Framework for Artificial Intelligence” on December 11, 2025. The Executive Order aims to limit State laws that restrict AI, posing compliance challenges and inhibiting innovation by AI companies, by:

1. Asserting a preference for a “carefully crafted national framework” that is minimally burdensome, as opposed to “50 discordant State” standards.
2. Establishing an AI Litigation Task Force that will challenge State AI laws that are deemed unlawful or inconsistent with this Executive Order.
3. Evaluating existing State AI laws and identifying those that conflict with the Executive Order, require AI models to alter truthful outputs, compel AI companies to excessively disclose information, or promote AI innovation consistent with the Executive Order.
4. Restricting States with AI laws in conflict with this Executive Order from receiving funding under the Broadband Equity Access and Deployment Program and Federal grants.
5. Determining whether to establish a Federal reporting and disclosure standard for AI models.
6. Assessing the impact of the Federal Trade Commission Act on State laws that require AI models to alter truthful outputs.
7. Preparing a Federal policy framework for AI that would preempt State AI laws, without compromising State laws regarding child safety, data center infrastructure, or State AI use and purchasing activities.

This Executive Order is the latest in a series of actions taken by President Trump to deregulate AI and encourage AI innovation. He issued Executive Order 14179 Removing Barriers to American Leadership in Artificial Intelligence on January 23, 2025, just three days after taking office. His proposed budget bill, dubbed “One Big Beautiful Bill,” included a 10-year moratorium on State AI regulation, which the Senate voted 99-1 to remove in early July. Later that month, the White House released America’s AI Action Plan, advocating for AI innovation, infrastructure, and international diplomacy and security, as well as dismantling regulations viewed as barriers to progress.

For employers, especially those operating in multiple States, a national AI regulatory framework offers a clearer compliance strategy and avoids challenges associated with determining how to conduct business in a consistent manner under laws that could conflict across States.

Human resources professionals should exercise caution in an increasingly deregulated AI environment. This Executive Order is likely to face legal challenges. Until federal courts rule on its validity, employers remain in a difficult position. State and local laws, such as New York City’s bias audit law, continue to apply unless and until they are struck down by a court or repealed by the state or locality. Employers that disregard applicable state or local requirements based solely on this Executive Order may risk significant penalties if the Order is ultimately found to be unconstitutional.

In addition, many State and Federal civil rights laws protecting equal employment opportunity continue to apply to the use of AI for personnel-related decisions and processes. The rapid proliferation of AI tools could result in unanticipated outcomes, making it incumbent on HR professionals to monitor and validate AI outcomes, ensuring there is human oversight of any AI-facilitated process impacting applicants and employees.

HR Works will continue monitoring AI-related changes at the Federal and State levels to keep you up to date and aware of the growing impact of AI on human resources. Visit our blog for more AI-related articles.