One Rulebook for AI? White House Executive Order Puts States on Notice

New Executive Order Signals Federal Preemption Strategy for State AI Laws

JAN 7, 2026 - The White House issued an Executive Order on December 11, 2025 that pushes for a single national approach to AI rules. The Order directs agencies to limit conflicting state laws and sets up a fast-moving timeline that could reshape how AI products are built, deployed, and audited in the U.S.

For executives and legal teams, expect a period of uncertainty. Federal agencies will move to challenge certain state AI requirements while states defend their authority. Your job: keep compliance flexible and decision-ready while the ground shifts.

Why this matters

Different state rules have driven up compliance costs and slowed rollouts. The administration is betting that one federal standard will lower friction and support competitiveness. Until courts weigh in, you'll need clear scenarios for how to operate under conflicting signals from federal and state authorities.

What the Order does - at a glance

• AI Litigation Task Force (30 days): DOJ will form a task force to challenge state AI laws on constitutional and preemption grounds, including arguments tied to interstate commerce and conflicts with federal rules.
• Commerce Evaluation (90 days): The Secretary of Commerce must identify state AI laws that conflict with the Order's policy goals. This includes laws that require models to alter truthful outputs or compel disclosures that may raise First Amendment concerns. Commerce may also spotlight state laws that support innovation.
• Federal Funding Restrictions (90 days): Commerce will set conditions for access to remaining BEAD funds; states with flagged AI laws may be ineligible. Agencies must review discretionary grants and consider conditions tied to state AI lawmaking or enforcement during performance periods.
• FCC Reporting Standards (within 180 days or 90 days after Commerce's evaluation): The FCC must consider federal reporting/disclosure standards for AI models that could preempt conflicting state rules.
• FTC Policy Statement (90 days): The FTC will clarify how the FTC Act's prohibition on unfair or deceptive practices applies to AI. It will also address when state rules that force output changes are preempted by federal law.
• Federal Legislation: Senior advisors must draft a proposal for a uniform federal framework that preempts conflicting state laws.
• Protected Categories: The Order exempts certain state areas from preemption efforts, including child safety protections, AI compute and data center infrastructure, and state government procurement and use of AI, with more categories to be determined.

Timelines that drive your planning

• Day 30: DOJ task force launches litigation strategy.
• Day 90: Commerce evaluation of state laws; BEAD funding conditions; FTC policy statement.
• Day 180 (or 90 days after Commerce evaluation): FCC proceeding on federal reporting and disclosure standards.

Immediate risks and opportunities

• Regulatory whiplash: Preemption efforts could pause, narrow, or overturn certain state requirements while others remain enforceable during litigation.
• Funding exposure: States with flagged AI laws may lose access to BEAD funds, with downstream effects for partners and infrastructure plans. See the NTIA's BEAD overview for context: NTIA BEAD Program.
• Reporting standardization: An FCC-led standard could simplify multi-state disclosures but add federal reporting overhead.
• Speech and output rules: Requirements to alter truthful outputs or compelled disclosures may face heightened federal challenge.
• Safe zones: Child safety, compute/data center, and state procurement use cases are explicitly carved out-for now.

Action plan for the next 90 days

• Map your exposure: Inventory all AI deployments and pilots; tie each to current state requirements, disclosures, audits, and model/output obligations.
• Scenario models: Build playbooks for three paths-state laws stay in force, are preempted, or stall in litigation. Define go/no-go triggers for launches and updates.
• Grant and funding review: If you operate in BEAD-funded states or rely on related infrastructure, assess state eligibility risk and contingency options.
• Contract hygiene: Update customer and vendor terms to address jurisdictional changes, reporting duties, and suspension rights if laws shift mid-contract.
• Documentation discipline: Strengthen model cards, evaluations, and disclosure logs now; you'll need clean records regardless of which standard wins.
• Regulatory watch: Assign owners to monitor DOJ filings, Commerce's evaluation, the FTC statement, and the FCC docket. Prepare comments where your risk is material.
• Board brief: Set a simple dashboard: key dates, affected products/markets, funding exposure, and expected legal spend.

Longer-term moves

• Design for variability: Build modular compliance controls so features, disclosures, and guardrails can be turned on/off by jurisdiction without code rewrites.
• Invest in evidence: Maintain repeatable testing, bias detection, and incident response procedures that can satisfy both federal and state expectations.
• Public policy posture: Engage early on FCC reporting standards and the legislative proposal; your operational data can shape workable rules.

What to watch

• DOJ preemption cases: Which state provisions get targeted first (e.g., compelled output changes, mandatory disclosures) and early court signals.
• Commerce evaluation scope: How broadly "conflict" is defined and which state laws are flagged as innovation-friendly.
• FTC interpretation: Where the line is drawn between deceptive practices and legitimate content controls.
• FCC standard: Whether disclosures are model-level, use-case-specific, or risk-tiered-and how preemption is framed.

Resources

• White House: Presidential Actions (for updates to the Executive Order and related actions)
• Complete AI Training: Courses by Job (fast upskilling for legal, compliance, product, and data teams)

Bottom line: expect contested authority, shifting rules, and uneven enforcement for months. Keep your compliance stack flexible, your docs clean, and your options open while the federal standard takes shape.