Trump AI Law Moratorium Makes a Controversial Comeback

Donald Trump’s latest “AI Action Plan” revives the controversial AI law moratorium that once faced bipartisan backlash. The plan includes language that warns against sending federal AI funding to states with “burdensome” regulations, framing such oversight as a threat to innovation. This echoes a failed congressional effort that aimed to block states from regulating AI for 10 years—now resurrected with softer language but equally high stakes. By tying federal funds to a state’s AI policy stance, the Trump AI law moratorium could shape the future of local tech governance.

How the Trump AI Law Moratorium Could Affect State Funding

While this version avoids naming a specific timeframe, it subtly pressures states to steer clear of strict AI regulations. The Office of Management and Budget will now collaborate with federal agencies to review a state's AI policies before awarding funds. That means states passing strong rules around AI, including facial recognition or data privacy, may risk losing access to discretionary federal support. Trump’s stance suggests AI is too “young” to be burdened by regulation and aims to reward states that adopt a pro-innovation mindset aligned with his administration’s AI priorities.

Federal Communications Commission Enters the AI Regulation Debate

The plan also taps the Federal Communications Commission (FCC) to assess whether state AI laws interfere with federal communications duties. Although the penalties remain unclear, this move signals a broader federal attempt to preempt state control. Critics argue this rebranded Trump AI law moratorium could discourage responsible AI oversight at the local level, particularly where civil rights or public safety are concerned. With no expiration clause this time, it opens the door for long-term federal leverage over how states legislate AI technologies.

What's Next for Trump’s AI Strategy and State Sovereignty

More executive orders are expected to follow, adding teeth to Trump’s AI blueprint. The focus will reportedly include streamlining AI infrastructure, accelerating tech adoption, and even eliminating diversity and climate language from government AI systems. For many, the return of the Trump AI law moratorium—though cloaked in vague language—represents a significant pivot toward federal dominance in AI policy. As debates intensify over state versus federal roles, the path forward for AI regulation in the U.S. remains more politically charged than ever.