Trump revives unpopular Ted Cruz plan to punish states that impose AI laws

President Trump is considering an executive order that would require the federal government to file lawsuits against states with AI laws, and prevent states with AI laws from obtaining broadband funding.

The draft order, “Eliminating State Law Obstruction of National AI Policy,” would order the attorney general to “establish an AI Litigation Task Force whose sole responsibility shall be to challenge State AI laws, including on grounds that such laws unconstitutionally regulate interstate commerce, are preempted by existing Federal regulations, or are otherwise unlawful in the Attorney General’s judgment.”

The draft order says the Trump administration “will act to ensure that there is a minimally burdensome national standard—not 50 discordant State ones.” It specifically names laws enacted by California and Colorado and directs the Secretary of Commerce to evaluate whether other laws should be challenged.

“That evaluation of State AI laws shall, at a minimum, identify laws that require AI models to alter their truthful outputs, or that may compel AI developers or deployers to disclose or report information in a manner that would violate the First Amendment or any other provision of the Constitution,” the draft order says.

The draft executive order was published by Transformer, an AI news site, and previously reported on yesterday by The Information.

Rejected Ted Cruz plan back in Trump form

The draft order brings back an idea proposed months ago by Sen. Ted Cruz (R-Texas), who wanted to shut states with AI laws out of the US government’s $42 billion Broadband Equity, Access, and Deployment (BEAD) program. Facing opposition from both Republicans and Democrats, Cruz softened his proposal, but it still lost in a 99-1 vote after Cruz himself gave up and voted against his own plan.

Trump’s draft order apparently would apply to about half of the funding available from the $42 billion program, which was created to deploy broadband to homes and businesses without modern access. The Trump administration previously threw out Biden-era plans to distribute the money and required states to rewrite their grant proposals with lower-cost alternatives.

Because of the Trump overhaul of BEAD, it’s projected that only about half of the $42 billion allocated by Congress in 2021 will be spent on deploying broadband. What will happen to the other half is undetermined. It could be deposited into the US Treasury, used for other broadband-related purposes like providing Wi-Fi and Internet-capable devices to US residents, or for overhauling municipal permitting systems.

Trump’s draft executive order would partially answer the question of how the other half will be spent. It would direct the Commerce Department to issue a policy notice specifying the conditions under which states may receive a share of the remaining money.

“That Policy Notice must provide that States with AI laws identified pursuant to section 4 of this order are ineligible for non-deployment funds, to the maximum extent allowed by Federal law,” the draft executive order says. “The Policy Notice must also describe how a fragmented State regulatory landscape for AI threatens to undermine BEAD-funded deployments, the growth of AI applications reliant on high-speed networks, and BEAD’s mission of delivering universal, high-speed connectivity.”

Non-broadband grants also threatened

Funding restrictions could extend beyond broadband because the order would direct federal agencies “to assess their discretionary grant programs and determine whether agencies may condition such grants on States… not enacting an AI law that conflicts with the policy of this order.”

The draft order would also require the Federal Communications Commission and Federal Trade Commission to take action against state AI laws. The FCC chairman would be directed to “initiate a proceeding to determine whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.”