Washington lawmakers had barely finished processing the news that Congress would not ban state AI legislation in the National Defense Authorization Act (NDAA) when a new rumor began circulating from the White House on Wednesday: President Donald Trump will, in fact, sign an executive order that would apparently give the federal government the ability to punish states for writing their own AI laws.
There was a possibility that it would be as drastic as the one leaked from the White House a few weeks ago, which would have given David Sachs, the billionaire venture capitalist and White House AI and crypto czar, immense influence over setting AI policy. That was likely to make it weak and symbolic in the face of the political reality that the overwhelming majority of Americans oppose the idea of a state AI moratorium while satisfying Trump’s desire for a moratorium already in place. But the prospect itself was so serious that it energized a group that rarely criticizes Trump: hard-right MAGA Republican podcasters wired into the White House whisper network.
Steve Bannon’s War Room A huge segment was devoted Wednesday night to warnings that the order is still alive, and hopes to re-enact the playbook they used to kill the AI moratorium effort last summer. His arguments against the moratorium have since become more explicitly right-wing. AI critic Joe Allen told host Natalie Winters on Thursday, “If President Trump signs this executive order, he will face the outrage of everyone who trusts him to protect legacy Americans, not only against immigrants, but against tech companies who are probably a major threat to their jobs and their rights.”
Behind the scenes, AI policy experts, lawyers and political activists – regardless of whether they were pro-preemption supporters or not – were working their connections in the White House, hoping someone could convince Trump that a moratorium – at least, one that was so swift and aggressive – would be political suicide. Two people familiar with White House dynamics said the person most likely to succeed in stopping Trump from signing the EO was White House Chief of Staff Susie Wills, who successfully imposed a sense of discipline on Trump’s political operations, is deeply trusted by Trump, and is famously averse to internal drama.
“He’s smart,” said a Republican operative working on AI policy. “I think she understands how bad this could be for the president politically.”
Recent polling indicates that a vast, bipartisan majority of Americans States oppose the idea of AI law moratoriumAnd few demographics are more hostile to the idea than the Republican MAGA base, which has long distrusted Big Tech and view AI as a threat to job security, traditional family values, and the mental health of their children, Supporting a moratorium would be disastrous for potential Republican presidential candidates associated with the MAGA base, such as Vice President J,D, Vance,
The upcoming midterms are also in play. Recent polls across the country indicate that the Republican Party already finds itself in a weak position: Last month, New Yorkers elected Democratic socialist Zoharan Mamdani over Trump-backed Andrew Cuomo for mayor; Meanwhile, Virginians overwhelmingly elected Democrat Abigail Spanberger to the House over Republican Winsome Earl-Sears. This week, Republicans won a special election for a vacant Tennessee House seat by nine points — but in a district that Trump won by 22 points in the presidential election.
Nothing is official until Trump puts pen to paper, but a draft of the executive order leaked before Thanksgiving had lawmakers, AI policy experts, and even supporters of preemption stumped, the idea that the federal government should create one set of AI rules rather than a 50-state patchwork. But rather than work on a federal framework that would have established AI rules in an unquestionable, constitutionally legal way, many Republicans and the Trump White House have instead adopted a draconian strategy: a blanket moratorium on state AI laws that would last for years, arguing that it would allow AI innovation to accelerate while Congress worked on said framework.
The concept of adjournment has proven divisive even within the GOP: During Trump’s first attempt to pass adjournment in his Big, Beautiful bill, a handful of Senate Republicans broke ranks with the party and joined Senate Democrats in opposing it. The latest hope was that the NDAA would be put on hold, requiring both Democrats and Republicans on the armed services committees to agree on the language.
But the draft executive order, released in the midst of bipartisan NDAA negotiations, was seen as an overly aggressive consolidation of power under Sachs — a venture capitalist furious at its reports. massive conflict of interest– Under the auspices of preemption. As written, the order would have directed multiple departments to begin punishing states with “tough” AI laws — all of which would have been required to coordinate with Sachs, the special adviser on AI and crypto, while singling out government agencies with expertise in AI and the technology, as well as the White House center for interagency coordination related to the tech, the Office of Science and Technology Policy (OSTP).
The draft order would have put the Justice Department in the difficult and exhausting position of suing states to enforce their own laws, directing the Attorney General to create an “AI Litigation Task Force” that would target states with so-called “tough” AI laws. (That move is already being challenged in his quest, handed down by Trump, to sue states to enforce their own environmental protection laws. Several states have done so filed suit against the federal government In response.)
Indeed, seasoned Washington operatives on both sides of the issue have grown frustrated with the aggressive and aggressive approach of the AI industry and VCs: bypassing concerned lawmakers, ignoring burdensome regulators, and talking directly to the President, from one billionaire to another, hoping Trump will cajole Republicans into compliance. It is inevitable that Trump will sign some kind of executive order regarding the waiver, simply because he has already said he wants to do so. But the actions of the comprador system have made the concept politically radioactive.
“I think there’s a lot of disagreement within the industry on this,” said Doug Callidas, SVP of government affairs at Americans for Responsible Innovation. The VergeWhile “more sophisticated” lobbyists like Google and Microsoft who have been in DC for a while “know what the art of the possible is,” players like Sachs and fellow VC Marc Andreessen don’t give an inch, But “right now they are the ones who have control of power,”
Lauren Finer contributed additional reporting.
