US President Donald Trump on Friday threatened to withhold federal broadband funding from states whose AI regulations he deems restrictive to American technological dominance.
Speaking to reporters alongside top advisers, including Treasury Secretary Scott Bessent, Trump emphasized the need for a single, centralized approval system, arguing that 50 differing state regulatory regimes impede innovation and complicate compliance, particularly for startups.
The move aligns with Trump’s broader strategy to position the US as a leader in artificial intelligence, a sector where China has made significant advances.
The executive order targets what the administration calls “onerous” state AI laws, allowing the Secretary of Commerce to assess state regulations for conflicts with federal priorities. States found in conflict could be blocked from accessing the $42 billion Broadband Equity Access and Deployment fund.
Trump’s order specifies that regulations related to child safety are exempt from scrutiny, but laws intended to prevent ideological bias or enforce anti-discrimination in AI could be curtailed. White House AI adviser David Sacks said the administration aims to check excessive laws that could stymie innovation.
Critics, including Democratic Representative Don Beyer, argue that the order could undermine state safety reforms, violate the 10th Amendment, and create a “lawless Wild West” for AI companies, increasing risks to Americans.
The order also calls for Congress to create a national AI standard that protects children, prevents censorship, respects copyrights, and safeguards communities, superseding conflicting state regulations.
Major AI companies, including OpenAI, Google, Meta, and Andreessen Horowitz, support federal regulation, while many state leaders insist they need the power to implement guardrails.
Recent examples include New York’s surveillance pricing law, California’s AI risk mitigation requirements, and laws banning AI-generated non-consensual sexual content and unauthorized political deepfakes.
Governors like Ron DeSantis and Gavin Newsom have proposed AI-focused legislation addressing data privacy, parental controls, and consumer protections.
