Trump Orders Federal Agencies to Challenge State AI Laws Through Litigation and Funding Cuts

Jan 15, 2026
Morrison Foerster
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Summary

President Trump directs federal agencies to sue states over AI regulations and threatens to cut funding from states with restrictive AI laws, while establishing a DOJ task force to challenge conflicting state legislation within 90 days.

Key Points

  • President Trump issues Executive Order directing federal agencies to challenge state AI laws through litigation and withhold federal funding from states with restrictive AI regulations
  • The order instructs the Department of Commerce to identify conflicting state AI laws within 90 days and refers them to a new DOJ task force for potential court challenges
  • Federal agencies receive direction to use existing authorities to preempt state regulations, with the FCC considering national AI disclosure standards and the FTC issuing policy statements on AI practices

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