State artificial intelligence laws are under sustained federal pressure. The administration has set a national policy framework as its objective, identified state rules it regards as obstacles, and built mechanisms to challenge them. Companies subject to those state laws reasonably want to know whether their compliance obligations are about to change.
The more useful question is narrower. What does the federal effort change now, what depends on the courts, and what can be accomplished only by Congress? The answer turns on how preemption actually works — and the first federal challenge to reach a courtroom shows how the rest is likely to unfold.
President Trump signed Executive Order 14365, "Ensuring a National Policy Framework for Artificial Intelligence," on December 11, 2025. Its architecture rewards a close read, because the order does not itself set aside any state statute. It directs the executive branch to act, and it asks Congress to legislate. The Attorney General is to establish an AI Litigation Task Force to challenge state laws in court. The Commerce Department is to catalog state statutes it considers onerous and refer them for potential suit. The FTC is to address when state requirements that compel changes to AI outputs implicate the federal prohibition on deceptive practices. The FCC is to weigh a federal reporting and disclosure standard. Discretionary broadband funding is conditioned on state cooperation. And the President's advisors are directed to prepare legislative recommendations for a federal framework that would preempt conflicting state law. The order also scopes that future framework, instructing that it leave in place state laws on child safety, AI compute and data-center infrastructure, state procurement and use of AI, and copyright. The stated rationale is that AI development and deployment are inherently interstate, and therefore a proper subject of federal regulation.
That request for legislation reflects how preemption is structured under our system. Preemption flows from the Supremacy Clause, which gives superior force to the laws of the United States. It comes in three forms — express, field, and conflict — and each rests on an act of Congress. An executive order directs the executive branch. It does not enact a statute, and it does not by itself displace state law. The Supreme Court made the point in Medellín v. Texas, holding that a presidential directive does not override state law without authority traceable to Congress or the Constitution. That is not a comment on the merits of the policy. It is the reason the order pursues litigation, agency action, and legislation rather than claiming to preempt on its own.
The sequence is also early. The evaluation Commerce was to publish by March 11 had not been released when its deadline arrived, a reminder that this framework is being assembled in steps rather than all at once.
The clearest read on how the effort will proceed came with the first case.
xAI sued Colorado on April 9, 2026, challenging the Colorado Artificial Intelligence Act (SB 24-205), the most comprehensive state AI statute in the country and one scheduled to take effect June 30. On April 24, the Department of Justice moved to intervene — the first time the federal government had entered a lawsuit against a state AI law, and the first courtroom action following the December order.
The terms of the federal filing are instructive. The Justice Department did not argue that the executive order preempts the Colorado statute, nor did it raise field, conflict, or interstate-commerce preemption. It argued instead that the law violates the Equal Protection Clause of the Fourteenth Amendment, challenging the statute's carve-out for algorithms intended to advance diversity or to redress historical discrimination. The basis is set out in the Department's announcement.
That choice signals how the contest will likely be fought — in court, statute by statute, on constitutional and statutory grounds, rather than resolved in a single stroke by the order itself. It cuts against any assumption that state AI laws will simply disappear. It is also a reminder that those state laws carry real legal vulnerabilities of their own. The equal-protection and First Amendment questions now being raised, by the federal government and by private plaintiffs, are serious, and some state provisions may not survive them.
What the first case did not produce is worth noting too. Enforcement of the Colorado law was paused on April 27 — not by a ruling on preemption, but through a joint motion by xAI and the Colorado Attorney General, holding enforcement while the state completes rulemaking and the court weighs a preliminary injunction. Colorado then signed a revised version of the law on May 14, with enforcement to follow the attorney general's rulemaking. The state is refining its statute, not abandoning it.
The order directs the Litigation Task Force to challenge state laws on several grounds, and the briefs now taking shape point to three. Each carries a real argument and a real answer, which is why none of them resolves quickly.
The first is the First Amendment. The administration's position is that a model's outputs are expressive, so a state rule requiring developers to adjust those outputs — to mitigate bias, or to avoid what the order calls alterations to "truthful outputs" — is a content-based regulation of speech that must clear strict scrutiny. The response is that disclosure, transparency, and anti-discrimination requirements have long been treated as permissible regulation of conduct, and courts have not extended full speech protection to a developer's compliance duties. Whether algorithmic output is speech, and whether these statutes regulate it as such, is unsettled.
The second is the Commerce Clause. Because a model may be built in one state, trained in another, and delivered nationwide, the administration treats its regulation as inherently interstate and argues that a patchwork of state rules unconstitutionally burdens that commerce. The answer is that the dormant Commerce Clause reaches state laws that discriminate against or unduly burden interstate commerce, not even-handed consumer-protection and anti-discrimination rules that apply to in-state and out-of-state actors alike. States regulate national businesses as a matter of course, and most such laws survive.
The third is federal funding. The order conditions broadband deployment money on states declining to keep laws the administration considers onerous. Conditions on federal funds are permissible when they are clear and related to the federal interest, but the Supreme Court held in NFIB v. Sebelius that a condition severe enough to leave a state no real choice becomes unconstitutional coercion. Whether tying broadband dollars to AI policy crosses that line is precisely the question state attorneys general have signaled they will litigate. And the spending power itself belongs to Congress, which sharpens the issue when the condition is set by executive action.
As the Colorado filing showed, the government led with none of these. It argued equal protection instead. For a business, the practical signal is that the structural theories remain contested enough that, given its first live case, the Department reached for a narrower constitutional claim — and that the broader fight will be resolved case by case, not at a stroke.
Two developments in administrative law shape how any preemption effort will be received, and the firm has tracked both — the Supreme Court's move away from agency deference and the revival of the major-questions doctrine.
Take the FTC's assignment. If the Commission issues a statement that state bias-mitigation requirements compel "deceptive" outputs and are therefore preempted, that interpretation will not carry the deference agencies once enjoyed. After Loper Bright — which the Puerto Rico Supreme Court has adopted for its own administrative law — a reviewing court measures the reading against the text of the statute itself. Section 5 of the FTC Act addresses unfair and deceptive practices. It does not speak to artificial intelligence or to the displacement of state law. Whether an interpretation can bridge that gap is a question a court will decide without putting a thumb on the agency's side of the scale.
The major-questions doctrine raises a related point. Authority to displace a broad category of state regulation is significant enough that courts will look for clear congressional authorization before reading it into a general statute. That is one reason the order also pursues legislation. A statute passed by Congress resolves these questions cleanly, where agency interpretation and executive direction invite years of litigation.
These are the questions our practice is built to argue. The firm's appellate bench includes the Hon. Edgardo Rivera García, a former Associate Justice of the Supreme Court of Puerto Rico, and attorneys who served in the Office of the Solicitor General — counsel whose work sits at the intersection of constitutional and administrative law, which is where this fight will be decided.
For a company operating across Puerto Rico and the mainland, the practical question is direct. Does the federal effort relieve you, today, of obligations under state or territorial AI law? It does not — not yet, and not by executive order alone.
The obligations on the books remain enforceable. California's Transparency in Frontier Artificial Intelligence Act took effect January 1. Texas's Responsible AI Governance Act is in force. Colorado's revised act is moving toward enforcement. Each remains valid law unless and until a court enjoins it or Congress preempts it — and Congress has twice declined to pass that preemption statute, stripping a moratorium from the budget bill and omitting one from the defense authorization.
The posture that holds up under every outcome is the straightforward one. Comply with the laws as written. Build governance to a recognized standard such as the NIST AI Risk Management Framework, which several states treat as a safe harbor and which is likely to satisfy a federal framework as well. And engage where the durable rules are being written. The legislative recommendations now in preparation will shape any national standard, and that process is open to input from the businesses it will govern.
A closing, institutional point. Executive orders are not empty. They direct agencies, set enforcement priorities, and carry real consequences for any business in the government's path. But the rules that ultimately bind companies come from statutes and from courts. Having worked from inside government, we read these sequences for what they are — the early and consequential steps of a process whose outcome Congress and the judiciary will determine. The task now is to follow that process closely and to plan for more than one result.
Maceira Zayas advises companies on regulatory strategy and compliance across Puerto Rico and Washington, D.C., including the federal and state developments shaping artificial intelligence governance. This article is provided for informational purposes only and does not constitute legal advice.
