According to Mashable, on Thursday, President Donald Trump signed an executive order calling for a “national framework” on AI regulation, aiming to federalize control and curb state efforts. The order explicitly states that “excessive State regulation thwarts” innovation and warns that states with “onerous AI laws” may be punished by having federal funds for high-speed internet access withheld. The policy was produced in consultation with David Sacks, a tech venture capitalist and Trump’s special advisor for AI and crypto. This follows state actions in 2025, where California and New York passed laws requiring AI transparency and teen user protections. The same day, child safety groups began airing a PSA warning of AI chatbot dangers for kids, and the order faces uncertain popularity and potential legal challenges.
The Silicon Valley Playbook
Here’s the thing: this isn’t really about creating a “national framework.” It’s about stopping one. States like California, with its SB 53, were actually building frameworks with basic rules around transparency and protecting teenagers. The tech lobby, which has always hated the idea of 50 different regulatory regimes, now has its dream scenario: an order that uses the federal purse to strong-arm states into inaction.
And the architect of this move is telling. David Sacks, the VC and Trump advisor, has a direct financial stake in unfettered AI growth. A New York Times investigation just detailed how his investments stand to benefit. So when critics like Michael Kleinman from the Future of Life Institute call this a “gift for Silicon Valley oligarchs,” it’s hard to argue. The order basically says the only acceptable regulation is the kind the industry itself might eventually agree to.
The Real Stakes Beyond Innovation
But let’s talk about what “innovation without cumbersome regulation” actually means right now. OpenAI is being sued by families of teens who died by suicide after heavy engagement with ChatGPT. The company denies responsibility in the case of 16-year-old Adam Raine. The executive order pays lip service to protecting children, but its primary mechanism is to disarm the governments closest to the problem.
Think about that. The order itself claims to want to protect kids, while simultaneously kneecapping the state laws most likely to do it. It’s a classic move: promise safety at the federal level while ensuring nothing concrete happens at any level. The child safety PSA that launched the same day feels like a direct, desperate rebuttal to this entire approach.
A Precedented And Unpopular Fight
This isn’t Trump’s first try. Earlier this year, his One Big Beautiful Bill Act tried to ban state AI regulation for a full decade. It was wildly unpopular with voters and got shot down in the Senate 99-1—a truly stunning bipartisan moment. Even some MAGA figures like Steve Bannon and, at the time, Rep. Marjorie Taylor Greene opposed it. Greene fought against the moratorium, and internal MAGA fights over AI policy have been brewing.
So why push an executive order that mirrors a failed, hated legislative provision? Speed and control. Legislation can be amended and debated. An order from the Oval Office is immediate. But it’s also fragile. It will be challenged in court, probably immediately. The threat to withhold essential funds like broadband money is a blunt instrument that may not survive judicial review.
What Happens Now?
Basically, we’re headed for a legal brawl. States with active laws, like California, will likely call the bluff. Can the federal government really deny rural communities internet access because a state passed an AI transparency law? That’s a brutal political look, even if the legal theory holds up.
And it leaves everyone in a weird limbo. Companies that operate nationally might breathe a sigh of relief, but the threat of future litigation—like those heartbreaking suicide cases—hasn’t gone away. The order tries to freeze the regulatory landscape in its Wild West state. But the casualties of that lawlessness are already piling up. The question isn’t just about innovation versus regulation anymore. It’s about who gets to write the rules, and who pays the price while they’re being debated.
