The machinery around a bold federal bid to override state-level AI rules has screeched to a halt—at least for now. A draft directive crafted inside Washington’s walls, designed to challenge state authority over artificial intelligence and even threaten states’ access to broadband funds, has been quietly tucked back into the drawer, according to people familiar with the matter.
The shelved order offered a glimpse into the administration’s ambition: a sweeping attempt to bulldoze the growing maze of state AI regulations that tech giants say are suffocating innovation. Its existence alone sparked a frenzy among lawmakers, industry players, and advocacy groups who immediately sensed the magnitude of the power struggle brewing beneath the surface.
Inside the draft, the Attorney General was poised to launch an “AI Litigation Task Force” with a singular mission—take states to court for passing laws that Washington might deem out of bounds. The Department of Commerce, too, was set to scrutinize state-level rules and potentially clamp down on broadband funding for jurisdictions that didn’t fall in line.
Many states have been holding the line on AI, insisting their residents need shields against deepfakes, digital scams, and the darker edges of emerging tech. Earlier this year, lawmakers across the political map rejected an effort to handcuff state authority, blasting it as an attack on their ability to defend their communities.
But the debate reignited after the administration backed a congressional push to insert similar language into the massive annual defense bill—an unexpected twist that jolted the issue back onto the national stage.
Tech powerhouses like Google, OpenAI, and Andreessen Horowitz have been banging the drum for federal dominance, wary of navigating a nation stitched together by dozens of incompatible AI mandates. Their message: innovation thrives on consistency, not chaos.
Not everyone was buying it.
Voices from both major parties stepped forward, warning that the proposal crossed foundational lines. Critics called it an assault on federalism, a threat to consumer protection, and—if the most fiery voices are to be believed—an outright gift to Big Tech.
One lawmaker bluntly warned that states must keep the authority to craft their own AI rules, while others dubbed the draft unlawful and dangerous, especially for rural communities that rely on federal broadband investment.
Consumer advocates were equally sharp, pointing to the real-world damage AI is already inflicting. To them, the idea of stripping states of their power to curb harm was almost surreal.
For now, the directive remains suspended in political limbo—neither advanced nor abandoned, waiting to see whether the winds in Washington shift again. The battle over who gets to steer America’s AI future is far from settled, but one thing is clear: the next move will echo well beyond the Beltway.
