The Viability of Trump’s AI Executive Order and Its Impact on IP Rights

On December 11, 2025, President Trump issued an executive order entitled “Ensuring a National Policy Framework for Artificial Intelligence.”[1] The Order’s stated purpose is to allow United States (U.S.)-based artificial intelligence (AI) companies to “be free to innovate without cumbersome [State] regulation.”[2] This Order proposes to do so through the creation of a framework that “forbid[s] State laws that conflict with the policy set forth in this order,” while simultaneously aiming to “ensure that children are protected, censorship is prevented, copyrights are respected, and communities are safeguarded.”[3]

To put this Order in context, the U.S. lacks a comprehensive federal AI policy, leading many states to adopt locally tailored regulations to fill the vacuum.[4] Although regulations across these jurisdictions may contain similar wording, legislatures have each taken a unique, locally tailored approach to regulating AI. The result is a patchwork of different regulatory combinations that, while addressing local concerns, may hinder the widespread development and use of AI systems. This fractured landscape sets the stage for a high-stakes jurisdictional battle between state consumer protection mandates and federal deregulatory goals.

Enforcement Mechanisms: The Carrot and the Sticks

The Order provides multiple enforcement mechanisms—primarily targeting existing state-level regulations—to achieve this uniformity. These are:

1. Section 3 includes a directive that the Attorney General is to establish “an AI Litigation Task Force (Task Force) whose sole responsibility shall be to challenge State AI laws” based “on grounds that such laws unconstitutionally regulate interstate commerce, are preempted by existing Federal regulations, or are otherwise unlawful in the Attorney General’s judgment,” such as based on a violation of the First Amendment.[5]

2. Section 5 includes a directive for the Secretary of Commerce to develop a “Policy Notice specifying the conditions under which States may be eligible for remaining funding under the Broadband Equity Access and Deployment (BEAD) Program” and a directive that Executive departments and agencies to determine their power to condition discretionary grants on whether states refrain from enacting and/or limit enforcement of AI regulations.[6]

3. Section 8 includes a directive for the “Special Advisor for AI and Crypto and the Assistant to the President for Science and Technology [to] jointly prepare a legislative recommendation establishing a uniform Federal policy framework for AI that preempts State AI laws.”[7]

Constitutional Viability of the Mechanisms Laid Out in the Order

The Order’s enforcement strategy is multifaceted, relying on multiple mechanisms. The durability of these mechanisms depends on how the federal courts navigate the constitutional issues the Order raises.

1. The Dormant Commerce Clause

The first enforcement mechanism, Section 3, lists three grounds on which the “AI Litigation Task Force” may base legal challenges to state AI laws. The first ground is that the state AI laws “unconstitutionally regulate interstate commerce.” This ground evokes the Dormant Commerce Clause, which prevents states from enacting protectionist measures or laws that place an undue burden on interstate commerce. The Task Force could argue that state-specific AI safety requirements—such as the Colorado Consumer Protections for Artificial Intelligence Act[8]—create a fragmented digital market that burdens interstate commerce and/or result in incidental unconstitutional discrimination.[9] However, the Task Force will face an uphill battle because the recent Supreme Court decision in National Pork Producers Council v. Ross reaffirmed that the Dormant Commerce Clause primarily protects against purposeful discrimination against out-of-state interests.[10] Merely having a practical effect on individuals outside of the state such as through increased compliance costs is insufficient to run afoul of the Dormant Commerce Clause.[11] Thus, the Task Force would likely need to demonstrate some discriminatory “protectionist” core in state AI laws for the Dormant Commerce Clause to prevent states from exercising their traditional police powers. If the courts maintain this narrow interpretation of the Dormant Commerce Clause, the administration may find it difficult to strike down neutral consumer protection laws based solely on their incidental impact on national AI providers.

2. Preemption from Existing Legislation

The second ground listed in Section 3 of the Order is preemption “by existing Federal regulations,” which can prevent states from regulating activities that impede achievement of a federal objective or are activities within a field that federal law so completely occupies. This preemptive power is based in the Supremacy Clause, which mandates that federal law, treaties, and the Constitution itself are the “supreme Law of the Land.”[12] This Order cannot grant such power because it is not federal law, however preemptive power can arise from rules created by federal agencies, such as the Federal Trade Commission (FTC). For example, the Order highlights the FTC Act as one possible source of preemption.[13] Further, by expanding the footprint of federal agencies—such as the Federal Communications Commission, the Securities and Exchange Commission[14], the Equal Employment Opportunity Commission, and the Consumer Financial Protection Bureau—into the AI space, the administration may create a “field preemption” effect that leaves little room for supplemental state oversight.

However, such a strategy runs into Major Questions Doctrine, which requires agencies to point to a “clear congressional authorization” when regulating matters of important economic and political significance.[15] Given that Congress recently rejected a federal moratorium on state AI regulation in the “Big Beautiful Bill,”[16] the Order’s attempt to use statutes like the FTC Act to displace state AI laws may be viewed by courts more as an unauthorized end-run around legislative inaction rather than as reinterpretations of the agencies’ Congressional mandates. This sets up a clash between administrative expansion and a judiciary recently skeptical of agency power in the absence of explicit statutory text.

3. The First Amendment

The third ground listed in Section 3 of the Order is a potential grab bag of grounds based on activities that “are otherwise unlawful in the Attorney General’s judgment,” such as the First Amendment. For example, Section 4 of the Order highlights “laws that require AI models to alter their truthful outputs, or that may compel AI developers or deployers to disclose or report information in a manner that would violate the First Amendment or any other provision of the Constitution.” The Order seems to indicate that such requirements could be unconstitutional compelled speech analogous to requiring public-school children to say the Pledge of Allegiance in West Virginia State Board of Education v. Barnette, 319 U.S. 624 (1943).

State AI laws that mandate disclosure requirements on the part of “AI developers and deployers” likely pass muster under Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985), since the states with such legislation will likely be able to argue the disclosure required by such state laws is reasonably related to a substantial state interest (like preventing consumer deception or preventing discrimination) and involves purely factual, uncontroversial information.

Whether “laws that require AI models to alter their truthful outputs” as described in Section on 4 of the Order would violate the First Amendment is more complex. A threshold issue is whether the output of an AI model is protected speech under the First Amendment. A case that provides insight into this point is Moody v. NetChoice, 603 U.S. 707 (2024). Reading the tea leaves in this case suggests that several Supreme Court justices are skeptical that the output of AI models is protected by the First Amendment.[17] If AI output is protected speech under the First Amendment, this could inadvertently provide a legal basis to challenge the Copyright Office’s refusal to register AI-generated works,[18] potentially opening a can of worms for the administration and providing a further boon for the AI companies this Order seeks to benefit.

4. Federal Spending

Threats to and actual restrictions of state funding, described in Section 5, relies on the broad power of the Executive Branch to manage expenditures, subject to their consistency with Congressional funding objectives. For example, the administration may rely on the Executive Branch’s authority to set agency priorities to restrict states from accessing discretionary grants, like how this authority was used to condition and terminate National Institutes of Health (NIH) grant funding to universities. The Executive Branch has greater constitutional power to condition discretionary grants than to claw back formula grants, such as BEAD, the multibillion-dollar federal program established to expand high-speed internet access across the United States. However, the extent of such Executive control over funds appropriated by Congress is an active area of litigation in the context of NIH grants.[19] Therefore, where federal courts end up in those cases may inform the breadth of Executive power in this context. However, that the Trump administration has leveraged threats to federal funding to extract concessions from multiple universities[20] suggests that many states may choose to suspend enforcement of AI laws rather than risk critical funds.

5. Preemption from New Legislation

The preemptive effect of Congressional legislation, described in Section 8, is based in the Supremacy Clause. However, to be effective, Congress must pass this legislation, and recent Congressional efforts to interfere with state regulation of AI have been overwhelmingly defeated.[21] Therefore, at this time, it appears that this is the least useful enforcement mechanism listed in the Order for the administration.

How could this Order impact intellectual property rights?

The Executive Order is anticipated to have significant effects on intellectual property, particularly copyright law. While federal law governs copyright infringement claims, many current lawsuits against AI companies also include state law contracts and tort claims, such as unfair competition.[22] These state law claims provide a secondary layer of liability for harms that may fall outside the scope of a copyright infringement claim. Based on this Order, the Task Force and/or the AI companies themselves may argue that these state laws are unconstitutional as applied because they create impermissible burdens on interstate commerce. If successful, this would weaken or remove this secondary layer of liability and significantly strengthen the position of the AI companies in litigation. IP litigators should prepare for a landscape where state law “gap-filling” claims are increasingly vulnerable to constitutional challenges.

Further, the Order’s directive to “ensure that . . . copyrights are respected,”[23] may indicate a push for AI training as fair use. President Trump has signaled that he takes a broad view of fair use and views licensing of training data as a hurdle to American AI dominance.[24] Though the Executive Branch cannot rewrite the Copyright Act, it can influence outcomes through Department of Justice (DOJ) “Statements of Interest” in ongoing AI copyright cases. Should these Statements prove effective, it would wipe out billions of dollars in potential liability for AI companies by legitimizing their data-training practices.

In the patent sector, the removal of state-level barriers would enhance the commercial value of AI-related IP. This impact would be relevant given that major technological hubs with strong regulatory impulses (like California and New York) will no longer be able to impose local rules on AI development and use. Ultimately, a unified regulatory landscape reduces the risk profile for AI investment, thereby increasing the strategic importance of securing robust patent protection for AI architectures. A predictable federal regime may also transition the focus from defensive patenting and reliance on trade secrets to active monetization across the AI sector.

What does this all mean?

Though President Trump’s Executive Order, “Ensuring a National Policy Framework for Artificial Intelligence,” is not a substitute for Congressional action, it serves as a definitive signpost of the administration’s deregulatory trajectory. Through a combination of litigation, financial pressure, and administrative rulemaking, the Order attempts to clear the path for U.S. AI dominance. It is important to note that only one of these tools may need to stand up under judicial scrutiny in federal court for this Order to advance its policy goals. What is clear is that this Order represents the latest and largest step along the deregulatory path laid out by the second Trump administration.[25]

[1] Executive Order, Ensuring a National Policy Framework for Artificial Intelligence (Dec. 11, 2025), https://www.whitehouse.gov/presidential actions/ 2025/12/eliminating-state-law-obstruction-of-national-artificial-intelligence-policy/.

[2] Id. at Sec. 1.

[3] Id.

[4] See, e.g., https://mbhb.com/intelligence/snippets/mapping-the-rise-in-state-level-ai-regulation-in-the-us-september-2024-review/; https://mbhb.com/intelligence/snippets/mapping-the-future-the-rise-of-state-level-ai-regulation-in-the-united-states/

[5] Ensuring a National Policy Framework for Artificial Intelligence (Dec. 11, 2025) at Sec. 3.

[6] Id. at Sec. 5.

[7] Id. at Sec. 8.

[8] SB24-205, https://leg.colorado.gov/bills/sb24-205.

[9] See Hunt v. Washington State Apple Advertising Comm’n, 432 US 333, 350-52 (1977).

[10] 143 S. Ct. 1142, 1146 (2023).

[11] Id. at 1149-50.

[12] U.S. Const. art. VI, cl. 2.

[13] Id. at Sec. 7.

[14] See, e.g., “Select Issues: Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964” (5/18/2023) available at https://data.aclum.org/storage/2025/01/EOCC_www_eeoc_gov_ laws_guidance_select-issues-assessing-adverse-impact-software-algorithms-and-artificial.pdf.

[15] West Virginia v. EPA, 142 S. Ct. 2587, 2596 (2022). See also Brown & Williamson, 529 U.S. 120, 160 (2000) (“We are confident that Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion.”)

[16] U.S. Senate Comm. on Commerce, Sci. & Tr., Senate Strikes AI Moratorium from Budget Reconciliation Bill in Overwhelming 99–1 Vote (July 1, 2025), https://www.commerce.senate.gov/2025/7/senate-strikes-ai-moratorium-from-budget-reconciliation-bill-in-overwhelming-99-1-vote/8415a728-fd1d-4269-98ac-101d1d0c71e0.

[17] Savage, Christopher W., et al. New AI Executive Order Seeks to Preempt State AI Laws (December 17, 2025) https://www.dwt.com/blogs/artificial-intelligence-law-advisor/2025/12/trump-ai-executive-order-legal-analysis.

[18] See Thaler v. Perlmutter, 130 F.4th 1039 (D.C. Cir. 2025).

[19] See, e.g., Nat. Inst. Of Health v. Am. Public Health Ass’n,145 S. Ct. 2658 (2025).

[20] See, e.g., “Cornell University to pay $60M in deal with Trump administration to restore federal funding,” (November 7, 2025), https://apnews.com/article/trump-cornell-federal-funding-f4e2edc67f9423542e7ab6ffd3fddfb0.

[21] U.S. Senate Comm. on Commerce, Sci. & Tr., Senate Strikes AI Moratorium from Budget Reconciliation Bill in Overwhelming 99–1 Vote (July 1, 2025), https://www.commerce.senate.gov/2025/7/senate-strikes-ai-moratorium-from-budget-reconciliation-bill-in-overwhelming-99-1-vote/8415a728-fd1d-4269-98ac-101d1d0c71e0.

[22] See, e.g., Compl., The New York Times Company v. Microsoft Corp., No. 1:23-cv-11195, (S.D.N.Y. Dec. 27, 2023).

[23] Ensuring a National Policy Framework for Artificial Intelligence at Sec. 1.

[24] See, e.g., Remarks on Signing Executive Orders at the Artificial Intelligence Summit, July 23, 2025 (“You can’t be expected to have a successful AI program when every single article, book, or anything else that you’ve read or studied, you’re supposed to pay for.”)

[25] See also https://mbhb.com/intelligence/snippets/what-trumps-second-term-means-for-ai-regulation-in-the-united-states/#_ftnref3