Federal Shift in AI Policy Signals Broad Preemption of State Laws

According to an article by C. Jade Davis and Brian C. Focht of Shumaker, a December 11, 2025, White House executive order outlines a federal AI policy framework intended to promote US innovation while reducing regulatory fragmentation. The Order emphasizes a “minimally burdensome” national approach and signals an effort to preempt state AI laws that conflict with federal objectives. For compliance professionals, the development marks a potential shift away from navigating a patchwork of state requirements toward a more centralized federal posture.

As Davis and Focht explain, the Order focuses first on establishing a national AI policy without mandating a specific federal regulatory regime. It calls on Congress to consider legislation preempting state AI laws and to direct the Federal Communications Commission to explore a federal reporting and disclosure standard for AI models. These steps are framed as responses to concerns that inconsistent state rules impede interstate commerce and innovation.

The Order’s second major thrust is the identification and challenge of conflicting state laws. The Secretary of Commerce must evaluate existing state AI statutes within 90 days, highlighting those that may compel altered “truthful” outputs, raise First Amendment concerns, or otherwise conflict with federal policy. In parallel, the Attorney General is directed to form an AI Litigation Task Force to challenge such laws on constitutional or preemption grounds. 

The Order also links compliance to funding, restricting access to certain federal broadband and discretionary grants for states that maintain conflicting AI laws. The Federal Trade Commission is instructed to clarify when state mandates affecting AI outputs could be considered preempted as deceptive conduct.

Organizations operating across multiple states should track agency actions, reassess state-based compliance programs, and monitor funding exposure. As Davis and Focht note, the Order provides direction rather than detail, making litigation and iterative regulatory guidance likely drivers of near-term risk and uncertainty.