Trump Administration Issues New AI Executive Order to Establish National Standard

The Trump Administration announced a new executive order on December 11, 2025, aimed at "removing barriers to United States AI leadership" by establishing a national regulatory standard and preempting state-level AI regulations.

The order characterizes the development of artificial intelligence as a competitive "race with adversaries" where America's progress is being hindered by what it calls "cumbersome regulation" – particularly regulations enacted by individual states.

The push for federal preemption

The executive order specifically targets state-level AI regulation, citing three key concerns: the difficulty of complying with "50 different regulatory regimes," allegations that some state laws force AI models to incorporate "ideological bias," and claims that certain state regulations improperly extend beyond their borders.

"State-by-State regulation by definition creates a patchwork of 50 different regulatory regimes that makes compliance more challenging, particularly for start-ups," the order states.

The administration specifically criticized a Colorado law banning "algorithmic discrimination," suggesting it "may even force AI models to produce false results in order to avoid a 'differential treatment or impact' on protected groups."

According to the administration, creating one national standard would minimize regulatory burden on AI development while superseding any conflicting state regulations. This approach aligns with ongoing debates about foundational artificial intelligence concepts and definitions that continue to evolve in regulatory contexts.

Andrew Bolster, Senior R&D Manager at Black Duck, acknowledges the challenges of inconsistent regulations: "Piecemeal and fractured regulations emerging across the U.S. would present a huge challenge to innovators, and the application of consistent regulatory guardrails at the federal level would improve that posture."

However, Bolster cautions about stability: "Just as it's important for innovators to have a consistent regulatory regime, it's important for that regulatory regime to be seen as stable in the long term for investors, and a knee-jerk 'rulebook' that gets overturned in another administration would be just as challenging to growth as a fractured constellation of regimes."

Anticipated legal challenges

Security experts predict significant legal opposition to the order's attempt to override state regulations.

Mike Hamilton, former CISO of the City of Seattle and current CTO of PISCES International, predicts: "States will most certainly sue the federal government, and an attempt to ban regulation at the state level is likely to make it to the SCOTUS."

Hamilton notes that precedents already exist where states have stepped in to regulate industries when federal oversight was deemed insufficient. He cites New York's Department of Financial Services and Department of Health as examples that "already regulate finance and healthcare, as a means of mitigating the dysfunction of Congress and executive orders that have pulled back on regulation at the federal level."

The stakes of such legal challenges could be substantial. "Any serious attempt by the federal government to preempt state regulation will be litigated and will likely get to the Supreme Court," Hamilton says. "Justices that are sympathetic to the unitary executive theory may indeed find for the administration. This would wildly reduce, and possibly eliminate, states' ability to regulate at all and put the entire issue of states' rights in jeopardy."

Hamilton further warns about international implications: "It would also exacerbate the international arms race for AI dominance and reduce trust in AI tools writ large." These concerns highlight the significant risks and challenges artificial intelligence poses for businesses operating in uncertain regulatory environments.

Organizational implications

Despite regulatory uncertainty, experts emphasize that organizations should establish their own robust AI governance frameworks regardless of government requirements.

Diana Kelley, Chief Information Security Officer at Noma Security, stresses the importance of internal controls: "Regardless of how AI regulations are structured, organizations need deep observability and strong governance to ensure AI systems operate as intended. Regulations often set the floor, not the ceiling."

Kelley recommends implementing comprehensive oversight measures: "What truly protects people and businesses as they adopt and innovate with AI is the continuous ability to track model and agent provenance, observe how systems perform during testing and runtime, validate their outputs, and detect when AI or AI agents drift into unsafe or unintended territory."

Transparency becomes particularly crucial in this environment. "Transparency and explainability are essential because they help us understand the factors driving agentic AI outputs and actions," Kelley notes. "Day to day AI safety comes from disciplined oversight that reduces unnecessary risk and prevents harm."

The executive order comes at a time when AI regulations are developing differently across global markets. Bolster points out: "In other markets such as the EU and China, there are stronger overarching regulatory regimes, and while these may not be as immediately beneficial to major tech companies, once established they can be expected to last long enough for structural ongoing investment in this existing but risky arena."

Market competitiveness considerations

The executive order emphasizes American competitiveness in AI development, which reflects broader concerns about maintaining technological leadership. Organizations implementing AI solutions should consider how effective artificial intelligence implementation delivers strategic business advantages while navigating complex regulatory landscapes.

The tension between innovation and regulation remains central to this debate, with federal authorities arguing that streamlined regulations will accelerate development while critics worry about inadequate protections without state-level oversight.

Global regulatory context

It's worth noting that this U.S. executive order exists within a global context where different approaches to AI regulation are emerging. The European Union's AI Act takes a more prescriptive approach with risk-based categories, while China has implemented regulations focused on algorithmic recommendations and data usage. This global patchwork creates additional complexity for multinational organizations developing or deploying AI systems across borders.

How businesses can prepare

As this executive order potentially reshapes the AI regulatory landscape, businesses should consider several strategies:

1. Develop a comprehensive AI governance framework that meets or exceeds current federal standards, regardless of state requirements.

2. Implement rigorous testing and monitoring protocols for all AI systems to ensure they operate as intended and produce reliable outputs.

3. Maintain documentation of AI development processes and decision-making to demonstrate responsible practices if regulatory requirements change.

Organizations using or developing AI technologies should also maintain awareness of ongoing legal challenges to the executive order, as the final regulatory structure may be determined through court decisions.

The clash between federal and state authority over AI regulation represents another chapter in America's complex relationship with technological innovation – balancing competitive advancement with appropriate safeguards in a rapidly evolving field.

The National Institute of Standards and Technology (NIST) AI Risk Management Framework provides valuable guidance for organizations seeking to implement responsible AI governance practices regardless of regulatory requirements.