A constitutional showdown is brewing as several states vow to ignore a recent executive order from the Trump administration aimed at stripping states of their power to regulate artificial intelligence (AI).
On Monday, California Gov. Gavin Newsom issued an executive order requiring safety and privacy guardrails from AI companies that contract with the state.
“California’s always been the birthplace of innovation. But we also understand the flip side: in the wrong hands, innovation can be misused in ways that put people at risk,” Newsom said in a statement after signing the order.
Under the new directive, companies must certify that their AI systems are protected against illegal content, harmful bias, and civil rights violations to qualify for state contracts. Simultaneously, the order pushes state agencies to adopt vetted AI tools to enhance the delivery of public services.
“While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way,” Newsom added.
The conflict marks a flashpoint in the federalism debate, pitting a White House favoring a “light-touch,” pro-innovation approach against governors who argue that local safeguards are essential to protect citizens from deepfakes, algorithmic bias, and privacy intrusions.
Earlier this month, the White House unveiled a national framework outlining how it wants Congress to address AI concerns, favoring a “light-touch” approach to regulation.
“Gov. Newsom’s EO suggests the important role states can play in shaping AI as customers,” Kevin Frazier, senior fellow at the Abundance Institute, said in an email. “States can and should align their own procurement standards with the values and beliefs of their residents.”
With Congress failing to pass comprehensive federal AI law, states have rushed to fill the vacuum. As of early 2026, 44 states have enacted at least one AI-related law. These range from Colorado’s landmark protections against “algorithmic discrimination” in housing and healthcare to Wisconsin’s bipartisan crackdown on AI-generated political ads and nonconsensual intimate imagery.
However, the Trump administration’s December executive order, “Ensuring a National Policy Framework for Artificial Intelligence,” seeks to curb the momentum. The order characterizes state-level regulations as a “morass of conflicting requirements” that stifle interstate commerce and bake “ideological bias” into technology. Most provocatively, the order suggests withholding federal discretionary funding from states that refuse to align with the national framework.
The response from state capitals has been swift and defiant. In addition to Newsom, Illinois Gov. JB Pritzker’s office labeled the administration’s move “unlawful” and a “blatant federal overreach.” Meanwhile, Wisconsin Gov. Tony Evers penned a direct letter to the President, calling the threat to withhold funding “breathtaking” given the bipartisan nature of state laws protecting victims of AI-generated exploitation.
While the federal Take It Down Act of 2025 successfully criminalized AI-generated deepfake pornography, it remains the only significant federal milestone. Other attempts at federal intervention, including a proposed 10-year moratorium on state AI laws, have failed to gain traction in Congress.
In the absence of a federal mandate, five key trends are dominating state legislatures in 2026: transparency, automated decision-making, digital replicas, frontier models, and price setting.
The American friction mirrors a cooling trend in Europe. The EU AI Act, once the gold standard for strict regulation, is currently under review. In late 2025, the European Commission proposed a Digital Omnibus package to scale back requirements for small businesses and delay high-risk classifications to maintain global competitiveness.
As the first quarter of 2026 closes, the path forward remains obscured by litigation and political posturing. While the President’s order cannot unilaterally strike down state statutes, the threat of legal challenges from the Attorney General and the loss of federal funds has created an environment of regulatory whiplash for tech developers and citizens alike.
Earlier this month, the Trump administration dropped an AI policy framework on Congress that urges lawmakers to establish a single national standard that would strip states of their power to regulate the booming technology. The proposal aims to cement American dominance in the global AI race as well as address rising public concerns over child safety, energy costs, and digital rights.
Last week, Trump appointed tech leaders to the President’s Council of Advisors on Science and Technology, an alliance that further cements the bond between Big Tech and the White House.
