US Preside Donald Trump signed a new executive order Thursday night that aims to challenge state AI laws and move toward a national framework. However, legal experts and startup activists say the order could trigger a wave of lawsuits and prolong uncertaiy for startups.
Formation of judicial working group and pressure on the states
The executive order, titled “Ensuring a National Policy Framework for Artificial Ielligence,” mandates the Justice Departme to form a special task force within 30 days to challenge certain state laws. The governme’s argume is that artificial ielligence is an example of ierstate commerce and should be regulated at the federal level.
Also, the Departme of Commerce has 90 days to prepare a list of “cumbersome” state laws in the field of artificial ielligence; An assessme that could affect states’ access to federal funding, including broadband Iernet expansion gras.
In addition, the Federal Trade Commission and the Federal Communications Commission have been asked to consider the possibility of developing federal standards that could override state laws. The Trump administration is also tasked with working with Congress to pass a single national AI law.
political coext; Congressional failure and concern over regulatory vacuum
The order comes as congressional efforts to stop state regulation have stalled. Lawmakers from both parties have warned that the lack of a clear federal standard could either leave consumers defenseless or leave companies virtually unregulated.
Michael Kleinman, director of U.S. policy at the Future of Life Institute, called the order “a gift to Silicon Valley oligarchs” and said big tech companies with their political clout in Washington are looking to avoid accouability. According to him, the role of David Sachs, responsible for the policy of artificial ielligence and cryptocurrency of the Trump administration, has been promine in promoting this approach.
Coinued uncertaiy for startups
Even supporters of the national framework acknowledge that this executive order does not create the framework itself. State laws remain in effect uil courts strike them down or states suspend their enforceme; A situation that can create a long period of transition and uncertaiy for startups.
Sean Fitzpatrick, CEO of LexisNexis North America and Europe, says states will defend their consumer protection powers in court, and the cases will likely go all the way to the Supreme Court.
Instead, critics warn, the legal battle will put immediate pressure on startups to juggle conflicting state and federal requiremes. Hart Brown, lead author of the Oklahoma Governor’s Artificial Ielligence Task Force recommendations, says startups typically don’t have costly regulatory programs uil they reach scale, and it’s difficult for them to adapt to a dynamic and uncertain environme.
Worried about the impact on innovation and trust
Arul Nigam, co-founder of Circuit Breaker Labs, says the confusion of state laws hurts small startups in chatbots and meal health AI the most, and it’s unclear whether these companies should self-regulate or wait for open-source standards.
Andrew Gamino-Cheung, CTO and co-founder of Trustible, also warns that the order could backfire: “Big tech and big startups have the resources to hire lawyers or wait, but this uncertaiy hits small startups the hardest.” Legal ambiguity makes it more difficult and costly to sell to risk-sensitive customers, such as financial institutions, legal teams and the health sector, he said.
Trump’s executive order is an attempt to unify AI policies in the US, but in the absence of congressional agreeme on a comprehensive law, it could lead to a long period of litigation and uncertaiy; A situation that, according to many activists, hurts startups the most and gives the advaage of patience and risk-taking to the tech gias.
