Trump’s AI Action Plan targets states with ‘burdensome’ regulations
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By
Chris Teale
The new roadmap recommends cutting off federal funding for states if they are deemed to be stifling innovation. Opponents say it’s the 10-year moratorium on state AI regulations under a different name.
President Donald Trump on Wednesday unveiled his administration’s action plan on artificial intelligence, with a warning that states could lose federal funding if they have “burdensome” regulations on the technology.
The AI Action Plan calls on the Office of Management and Budget to work with federal agencies that provide funding programs to “consider a state’s AI regulatory climate,” and limit any funding awards if a state’s AI regulations “may hinder the effectiveness of that funding or award.” It also urges the Federal Communications Commission to evaluate whether state AI regulations interfere with its ability to carry out its various obligations under the 1934 Communications Act, which created the agency.
“AI is far too important to smother in bureaucracy at this early stage, whether at the state or Federal level,” the action plan says. “The Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds, but should also not interfere with states’ rights to pass prudent laws that are not unduly restrictive to innovation.”
White House Office of Science and Technology Policy Director Michael Kratsios said in a statement that the AI Action Plan “galvanizes Federal efforts to turbocharge our innovation capacity, build cutting-edge infrastructure, and lead globally, ensuring that American workers and families thrive in the AI era.”
But the effort to quash or undermine state regulations deemed too burdensome comes just weeks after Congress tried and failed to insert a 10-year moratorium on states enforcing any AI regulations. Experts had suggested that the effort, which was initially included in the so-called “One Big, Beautiful Bill” but was removed in the Senate amid strong opposition, could return in some form.
And with this latest White House effort, opponents said it represents the return of that moratorium under a different guise. In a letter addressed to Trump, more than 140 groups representing unions, tech workers, artists, educators and more wrote to express their opposition to this part of the AI Action Plan.
“When it comes to preemption of state laws on artificial intelligence, we are united in opposition,” the letter says. “Americans deserve both meaningful federal protections and the ability of their states to lead in advancing safety, fairness, and accountability when AI systems cause harm.”
Those behind the letter blamed the nation’s big technology companies for the effort to restrict state regulations.
“Republicans and Democrats in Congress overwhelmingly rejected the wildly unpopular AI moratorium, so now Big Tech is doing an end-run around the democratic process by jamming it through via executive order,” Emily Peterson-Cassin, corporate power director at Demand Progress, which led the letter, said in a statement. “President Trump must reject this zombie AI moratorium and side with the American people, not the Big Tech billionaires eager to sacrifice Americans’ safety, jobs, water and power to AI.”
Other groups have similar reservations. Brad Carson, president of nonprofit Americans for Responsible Innovation that pushed against the congressional AI moratorium, said in a statement this new effort is a “cause for concern.”
And the Center for Democracy & Technology’s Vice President of Policy Samir Jain said in a statement the initiative is one of several “actively detrimental provisions” within the AI Action Plan.
Cody Venzke, senior policy counsel with the American Civil Liberties Union, said it raises legal questions, as the president is trying to act beyond any law passed by Congress.
“Now the administration is moving forward unilaterally,” Venzke continued in a statement. “The plan undermines state authority by directing the Federal Communications Commission to review and potentially override state AI laws, while cutting off ‘AI-related’ federal funding to states that adopt robust protections. This preemption effort stifles local initiatives to uphold civil rights and shield communities from biased AI systems in areas like employment, education, health care, and policing.”
The provision has its supporters, however. Adam Thierer, a resident senior fellow at the right-leaning R Street Institute think tank, wrote that it is “consistent” with the previously considered AI moratorium in Congress as a way to “discourage a patchwork of costly and confusing state AI regulations that would undermine the interstate marketplace and national priorities, including beating China in the AI race.”
“While the administration has some leverage to forestall regulatory efforts in the states, Congress still needs to consider AI legislation that would either impose a moratorium on state and local regulation or even more formal preemption of such conflicting mandates,” Thierer continued.
The groups that sent the joint letter opposing the restriction said the federal government must not prevent states from acting on AI.
“Bluntly, there is no acceptable version of an AI moratorium,” they wrote.