White House AI Executive Order sets its sights on free-market innovation
Increased state-level regulation potentially on the horizonOverview
On January 23, 2025, President Donald Trump signed the Executive Order (EO) Removing Barriers to American Leadership in Artificial Intelligence. The artificial intelligence (AI)- focused EO is anticipated by the White House to “sustain and enhance America’s global AI dominance” while continuing to develop “AI systems that are free from ideological bias or engineered social agendas.”
Unlike some AI initiatives at the federal level, the EO is a concise and aspirational mandate calling for development of an “AI Action Plan” within six months with the goal of advancing the new administration’s policy objective “to sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security.”
This EO follows another signed by President Trump shortly after he was sworn into office that repealed the EO signed by President Biden in 2023, Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. The previous administration sought to advance and govern the development and use of AI in accordance with a set of principles and priorities, such as privacy, civil rights and liberties, workers’ rights and consumer protection, as well as by promoting innovation, competition, and US leadership. The Biden AI EO was one of 78 policies enacted by the previous administration that were revoked on Day One of the Trump Administration under a far-reaching document titled Initial Rescissions of Harmful Executive Orders and Action.
While the specific contours of the emerging national policy direction on AI are not yet clear, one potential consequence of the new administration’s approach is an accelerating patchwork of state-level laws, enforcement actions, and litigation aimed at filling the void. In apparent anticipation of President Trump’s pro-innovation stance, Attorney General Bonta of California on January 13, 2025 issued two legal advisories on AI, stating “California is an economic powerhouse built in large part on technological innovation. And right alongside that economic might is a strong commitment to economic justice, workers’ rights, and competitive markets.” A day later, New York Governor Kathy Hochul ordered employers to disclose the use of AI in layoffs, adding to New York’s growing list of municipal and state restrictions on AI. In addition, Texas is considering HB 1709, the Texas Responsible AI Governance Act (TRAIGA), a bill that arguably goes further than other states, causing Forbes to remark on “Texas’s Left Turn on AI Regulation.” The absence of federal US legislation may portend more, not less, uncertainty for companies navigating AI adoption.
A contrasting approach to AI policy
President Trump’s AI EO outlines that its primary purpose, among others, is to drive AI innovation through the “strength of the US free markets, world-class research institutions, and entrepreneurial spirit.” To enable this purpose, the EO revokes certain existing policies and directives that are seen as a barrier to innovation. However, the EO does not specify which existing policies are the target of this mandate, leaving this to be determined by a comprehensive review by the new administration.
A White House fact sheet issued in conjunction with the signing of the EO critiques the Biden Administration policies, calling President Biden’s EO “dangerous” and charging that it “hinders AI innovation and imposes onerous and unnecessary government control over the development of AI.” That EO is also faulted in the fact sheet for establishing “unnecessarily burdensome requirements for companies developing and deploying AI that would stifle private sector innovation and threaten American technological leadership.”
A new direction for federal AI initiatives
The centerpiece of the new policy is the development of an AI Action Plan led by top White House officials with the input of agency heads across the federal government.
President Trump, who had campaigned on a promise to revoke President Biden’s AI EO, touted actions taken in his previous presidency, including a 2019 EO “recognizing the paramount importance of American AI leadership to the economic and national security of the United States.”
The fact sheet outlines several steps taken previously during the first Trump Administration, including doubling AI research investment, establishing national AI research institutes, advancing US leadership in developing AI technical standards, issuance of AI regulatory guidance to govern private sector development, and establishment of guidance for federal agency adoption of AI.
Building upon these earlier steps, the White House said the new EO “clears a path for the United States to act decisively to retain leadership in AI, rooted in free speech and human flourishing.”
One of the key areas that the Trump Administration’s AI team is likely to increase is its focus and intensity in developing AI technical standards globally with allies. This is consistent with its stated intent to achieve “global AI dominance” and previous positions of its AI leadership team, two members of which are returning to Washington, DC having also served in the first Trump Administration.
Implementing the revocation of the Biden EO
To carry out the revocation of the Biden EO, the Trump EO calls for an immediate review of “all policies, directives, regulations, orders, and other actions taken pursuant to the revoked Executive Order 14110.” The review is to be led by Michael Kratsios, Assistant to the President for Science and Technology (APST) David Sacks, Special Advisor for AI and Crypto (familiarly known as the “AI and Crypto Czar”), and Michael Waltz, Assistant to the President for National Security Affairs (APNSA), in coordination with other White House officials and key heads of other executive departments and agencies.
Agency heads are mandated to identify any actions taken by the federal government pursuant to the now repealed EO “that are or may be inconsistent with, or present obstacles to, the policy set forth in section 2 of this order.” These officials are called on to “suspend, revise, or rescind such actions, or propose suspending, revising, or rescinding such actions.”
Within 60 days of the EO, the Director of the Office of Management and Budget (OMB) is required to revise two OMB memoranda (M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence, March 28, 2024; and M-24-18, Advancing the Responsible Acquisition of Artificial Intelligence in Government, September 24, 2024) put in place by the Biden Administration to make them consistent with the new policy.
A path to unfettered action at the state level?
During the previous session of Congress, there were bipartisan efforts at the federal level to consider a comprehensive, statutory approach to AI regulation. Those efforts were in part framed as an effort to move away from a fragmented state-by-state approach and enact standards and guardrails at the national level to provide greater clarity and consistency. The Biden Administration AI policies represented an attempt to organize the federal use and understanding of AI and to put in place comprehensive standards that would align state activities in the governance of AI.
As the Trump Administration begins its process of developing its AI Action Plan, and with the President Biden-era policies now revoked, there may be renewed momentum for regulations and legislation at the state level. State attorney generals could also move into the current policy void with litigation attempting to address a wide range of issues. The result could be a patchwork of differing state laws governing AI.
While some states have already sought to fill the gap left by a lack of federal approach to AI, such as Colorado and its Consumer Protections for Artificial Intelligence Act (Colorado AI Act), many are only now throwing their legislative hat into the ring. On December 23, 2024, Texas State Representative Giovanni Capriglione filed the Texas Responsible AI Act, which seeks to regulate deployers (particularly employers) of certain high-risk AI systems in Texas. It does so by taking an approach similar to many existing AI laws (including the EU) by mandating organizations to implement risk-based mitigations, such as human oversight, reporting obligations, and regular system assessments.
As pressure mounts from organizations seeking clarification on how AI is regulated in the US, and as states seek to control the potential risks AI poses to their constituents, it is likely that greater state-level regulatory activity will emerge to provide direction to legislative developments in absence of success at a federal level.
Additional background
DLA Piper’s team of AI lawyers, data scientists, and policy experts assists organizations in navigating the complex workings of their AI systems to guide compliance with current and developing regulatory requirements. We continuously monitor updates and developments arising in AI and its impacts on industry across the world.
For an overview of executive actions taken thus far by the new administration, please see this compilation published by DLA Piper.
For more details on the now revoked Biden EO, please see this analysis by DLA Piper from October 31, 2023.
For more information on AI and the emerging legal and regulatory standards, visit DLA Piper’s focus page on AI.
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