Washington Wants to Run the AI Show. Don’t Bet the Farm on It Yet.
President Trump signed Executive Order 14365 back in December, and the commentariat immediately called it a death blow to state AI regulation. California trembles. Colorado scrambles. Washington rides in on a white horse to restore order to the republic. That’s a tidy narrative. It’s also premature.
Let’s be honest about what this executive order actually is and what it is not.
It is a political signal. It is a statement of intent. It is the Trump administration planting a flag and saying the federal government intends to be the dominant voice on artificial intelligence policy. What it is not is a law. And in America, that distinction still matters.
The Constitution Hasn’t Been Repealed
Under the Supremacy Clause, federal law preempts state law. That much is civics class material. But the operative word is “law.” Congress passes laws. Presidents sign executive orders. Those orders carry real administrative weight and can direct federal agencies to do significant things. What they cannot do, on their own, is invalidate a duly enacted state statute.
The executive order directs the Department of Justice to form an AI Litigation Task Force to challenge state AI laws in court. It directs the Commerce Department to evaluate which state laws conflict with the emerging national framework. And perhaps most consequentially, it instructs federal agencies to condition grants and federal funding on whether states have “restrictive” AI regulations on the books.
That last tool is the sharpest one in the drawer. Congress used a similar funding lever in the 1980s to get states to raise the drinking age. It worked. But the Supreme Court has also drawn a line. In NFIB v. Sebelius, the Court struck down the Obamacare Medicaid expansion coercion as unconstitutional, calling it a “gun to the head.” State attorneys general will cite that precedent immediately if Washington tries to condition essential infrastructure funding on dismantling consumer protection laws.
This will get litigated. Extensively.
Congress Still Has to Show Up
Here is the uncomfortable truth for those cheering the loudest for federal preemption: Congress failed to pass a comprehensive AI framework in 2025. Over 40 states introduced roughly 250 AI-related bills that same year. The states are not waiting for Washington. They are governing.
Senator Ted Cruz has put forward the SANDBOX Act. Senator Marsha Blackburn introduced the TRUMP AMERICA AI Act. House leaders issued a joint statement pledging a bipartisan framework. White House adviser David Sacks told Bloomberg that legislation could move within months. That is encouraging. But “could” is doing a lot of heavy lifting in that sentence, especially in an election year with a compressed legislative calendar.
Until Congress acts, the patchwork remains. California’s SB 53 is already live. Colorado’s AI Act takes effect in June. New York, Texas and a growing list of states have enacted their own transparency and consumer safety requirements.
What Federalism Actually Looks Like
The White House framework does something worth acknowledging. It explicitly carves out space for state authority in areas like children’s protection, fraud prevention, consumer protection and state government use of AI. That is not nothing. That is a recognition that federalism is not just a rhetorical device but a governing principle with real meaning.
The question conservatives should be asking is not simply “who wins, Washington or Sacramento?” The better question is whether the regulatory environment being built actually reflects constitutional order, promotes innovation and protects citizens. A federal framework that prevents California from strangling AI development with ideologically driven mandates is a good thing. A federal framework that consolidates all AI governance in a single administrative apparatus answerable only to whoever holds the White House is a different matter entirely.
Ben Sasse spent years arguing that Congress had handed too much power to the executive branch and then complained when the executive branch used it. That critique applies here too. The solution to bad state regulation is good federal legislation, passed by elected representatives and subject to democratic accountability. Not an executive order and a litigation task force.
The Practical Reality for Right Now
For anyone building AI systems or deploying AI tools in their business, the practical reality is straightforward. State laws remain in effect. Compliance obligations have not disappeared because the DOJ has a new task force. The companies that gut their compliance programs based on the assumption that federal preemption is imminent are making a very expensive wager on a multi-year legal fight.
The federal government has fired a shot across the bow. States are not flinching. Courts will spend years sorting through First Amendment arguments, Dormant Commerce Clause claims and spending power challenges. That is the system working exactly as designed, messy and slow as it is.
Federal clarity on AI would be genuinely valuable. The current state-by-state fragmentation creates real costs and real uncertainty. But clarity earned through constitutional process is worth waiting for. Clarity manufactured through executive pressure and litigation brinksmanship is built on sand.
