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Sen. Amy Klobuchar (D‑MN) warned Thursday that the administration’s latest approach to artificial‑intelligence regulation “is the wrong approach — and most likely illegal.” She stressed the need for a robust federal safety standard while preserving the limited protections currently afforded to Americans against AI‑related harms.
In a new executive order, the White House directed the Attorney General to assemble a task force aimed at challenging state‑level AI statutes. The Commerce Department was instructed to catalog “onerous” state regulations that could hinder innovation.
The move is widely seen as a victory for major AI players such as OpenAI, Google and venture firm Andreessen Horowitz, all of which have lobbied against state bills they deem burdensome.
The order follows a broader Republican push in Congress to impose a moratorium on state AI legislation—a provision that was recently stripped from the National Defense Authorization Act.
Andreessen Horowitz’s head of government affairs, Collin McCune, hailed the order as “an important first step” for U.S. competitiveness, but cautioned that lasting clarity will only come from congressional action on a national AI framework.
White House AI adviser Sriram Krishnan, a former Andreessen Horowitz partner, told CNBC that the administration intends to work with Congress to pass comprehensive legislation. “We want to push back on so‑called ‘doomer’ laws that have cropped up in a handful of states,” he said, adding that the order gives the executive branch tools to challenge statutes that could erode America’s global tech edge, such as recent measures in California and Colorado.
Krishnan emphasized that the order will not be used to target state laws designed to protect children.
Consumer‑advocacy group Public Citizen called the directive “mostly bluster,” arguing that the president cannot unilaterally preempt state law and that the order is likely to be litigated.
Legal experts predict that the executive order could trigger a wave of lawsuits, especially in states that have already enacted AI‑focused statutes. The order threatens to withhold federal funding from jurisdictions whose regulations are deemed “onerous.”
Colorado’s upcoming law, slated for June, will obligate AI developers to safeguard consumers from foreseeable algorithmic discrimination. State Rep. Brianna Titone, a co‑sponsor of the bill, dismissed the federal order as ineffective, noting that an executive order cannot dictate state policy.
In California, Governor Gavin Newsom recently signed legislation that, beginning in January, will require major AI firms to publicly disclose their safety and risk‑mitigation protocols. The bill’s author, Sen. Scott Wiener, warned that the president’s parallel push to expand chip sales to China and Saudi Arabia runs counter to the stated goal of maintaining U.S. dominance in AI.
On the commercial front, the president announced that Nvidia will be permitted to sell its high‑performance H200 chips to “approved customers” in China, provided the United States receives a 25 percent share of the revenue. Analysts see the move as a calculated attempt to balance geostrategic concerns with domestic industry interests, but it raises questions about export‑control compliance and competitive parity.
From a market perspective, the executive order introduces regulatory uncertainty that could affect valuation models for AI‑heavy firms. While some investors may welcome a federal pre‑emptive stance that promises a uniform national framework, others worry about short‑term legal frictions and the potential for a fragmented patchwork of state and federal rules.
Tech companies are now watching closely for the Commerce Department’s forthcoming report on state AI regulations. A clear, nationwide policy could streamline compliance, accelerate product roll‑outs, and enhance the United States’ ability to attract talent and capital. Conversely, prolonged legal battles could slow innovation pipelines and embolden competitors abroad that operate under more predictable regimes.
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