Who Gets to Regulate AI in America?.
Half of this prediction resolved within two months of publication. The other half is now in the hands of federal judges.
In brief
Partially resolved. President Trump signed an executive order in December 2025 directing the Justice Department to challenge state AI laws in federal court, and an AI Litigation Task Force stood up in January 2026. Whether the Supreme Court ultimately finds the effort unconstitutional, the second half of our prediction, remains open.
The Prediction
Trump issues an executive order to ban state AI legislation that SCOTUS finds unconstitutional.
What did the executive order actually do?
On December 11, 2025, the White House issued an executive order establishing a national AI policy framework aimed at what it calls state law obstruction. Rather than banning state statutes outright, it directs the Attorney General to stand up an AI Litigation Task Force whose sole job is to challenge state AI laws in federal court, on interstate commerce, federal preemption, and other constitutional grounds.
The order carves out state laws on child safety, data center permitting, and government procurement, and it cannot itself erase a state statute. That is the constitutionally careful version of the idea: preemption by lawsuit, not by decree. It is also what makes the outcome a question for judges rather than for the administration.
Why did we predict a constitutional collision?
The 2025 State of AI Report was published weeks after the Senate stripped a ten-year moratorium on state AI laws out of the July reconciliation bill by 99 votes to 1. The appetite for federal preemption had not died; it had lost its legislative vehicle. With Colorado, California, and Texas enacting AI statutes and hundreds more state bills in motion, a collision was structurally likely.
Our call was that the administration would reach for executive action, and that the courts would have the final word. The first part arrived within two months. The second is why the prediction remains pending rather than partially graded early.
What would count as a hit?
The wording is two-part and strict: an executive order against state AI legislation, and a Supreme Court finding of unconstitutionality. The order exists, though it litigates rather than bans, a distinction that will matter at grading time. Legal analyses of the preemption push note that executive-branch preemption without a congressional statute rests on contested ground.
A clean hit needs the Supreme Court to rule against the order or its key applications. Lower-court injunctions alone would argue for a partial. If the Task Force's suits succeed or never mature to the Court within the window, the miss is ours, and the grading note will say why. Litigation clocks are unkind to twelve-month predictions, and we knew that when we made the call.
Why it matters
The outcome decides whether the US gets one AI rulebook or fifty. Labs and deployers currently face a patchwork: comprehensive algorithmic-discrimination rules in Colorado, frontier-model transparency in California, and divergent obligations forming elsewhere.
It is also a global signal. The US spent 2025 arguing that innovation requires regulatory restraint. Whether that position is enforced by Washington against its own states, and whether the Constitution permits it, tells other governments how durable the American posture is.
What we are watching now
We are watching the AI Litigation Task Force's first lawsuits and their targets, whether Colorado's AI Act and California's frontier transparency law head the list, and how quickly district and circuit courts rule.
The parallel track is Congress: a federal AI statute with an express preemption clause would moot the executive-order fight and resolve the question the durable way. This prediction is graded in the State of AI Report 2026, publishing in October.
Frequently Asked Questions
Did Trump sign an executive order against state AI laws?
Yes. The order, signed December 11, 2025, directs the Justice Department to challenge state AI laws in federal court through an AI Litigation Task Force, rather than attempting to nullify them directly. It carves out child safety, data center permitting, and state procurement laws.
Can the federal government preempt state AI laws?
Through Congress, clearly: a federal statute with an express preemption clause would control. Through executive action alone, it is contested, which is precisely the constitutional question our prediction turns on. The executive order's litigation-first design is an acknowledgment of that limit.
Which state AI laws are most exposed?
Comprehensive algorithmic-discrimination regimes such as Colorado's AI Act and frontier-model transparency laws such as California's are the most likely early targets, since they most directly regulate model developers across state lines. The order's carve-outs shield child-safety and infrastructure-permitting laws.