AI Policy Newsletter - December 17, 2025

• Last week, President Trump signed the much-anticipated Executive Order aimed at preempting state-level laws deemed burdensome to innovation, following unsuccessful efforts by Congress to include a similar policy in the National Defense Authorization Act (NDAA), and previously the One Big Beautiful Bill during reconciliation. State officials, including California Attorney General Rob Bonta (D) and Florida Governor Ron DeSantis (R), have pushed back against the order, which is expected to be challenged in court. Key provisions of the order include:

  • AI Litigation Task Force: Directs the Attorney General to establish within 30 days a dedicated task force to challenge state AI laws on grounds including unconstitutional interstate commerce regulation, federal preemption, or other legal violations.

  • State Law Evaluation: Directs the Commerce Secretary to publish within 90 days an assessment identifying "onerous" state AI laws, particularly those requiring AI models to "alter their truthful outputs" or compel disclosures that may violate First Amendment protections. Colorado's algorithmic discrimination law is specifically cited as potentially forcing "false results" to avoid differential impacts on protected groups.

  • Financial Leverage: States with identified problematic AI laws will be ineligible for non-deployment funds under the Broadband Equity Access and Deployment (BEAD) Program. Federal agencies must assess conditioning discretionary grants on states either not enacting conflicting AI laws or agreeing not to enforce existing ones.

  • Federal Standards Development: Directs the FCC Chairman to initiate proceedings within 90 days on federal AI reporting/disclosure standards and the FTC Chairman to issue a policy statement within 90 days on how state laws requiring altered AI outputs may be preempted by federal prohibitions on deceptive practices.

  • Legislative Framework: Directs the Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology to prepare recommendations for a uniform federal AI policy framework.

    
    

• On December 9, Democratic Leader Hakeem Jeffries announced a new House Democratic Commission on AI and the Innovation Economy. According to the press release, the commission will meet through 2026 and will aim to “develop policy expertise in partnership with the innovation community, relevant stakeholders and committees of jurisdiction.” Representatives Ted Lieu (CA), Josh Gottheimer (NJ), and Valerie Foushee (NC) will serve as the co-chairs of the new commission, and Democrats, who last Congress served on the Bipartisan AI Task Force, will also hold leadership roles.  

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