On July 23, President Trump announced efforts to position the U.S. at the forefront of the global artificial intelligence (AI) race. “Winning the AI Race: America’s AI Action Plan” details how the federal government will advance the AI industry and was issued pursuant to the president’s January 23 Executive Order (EO) 14179, “Removing Barriers to American Leadership in Artificial Intelligence.”
The plan outlines three strategic pillars as its foundation, which include more than 90 federal policy actions. The pillars are titled “Accelerating Innovation,” “Building American AI Infrastructure,” and “Leading in International Diplomacy and Security.” The president also contemporaneously signed three executive orders to implement the plan. They include “Preventing Woke AI in the Federal Government,” directing federal agencies to procure only ideologically neutral large language models (LLM); “Accelerating Federal Permitting of Data Center Infrastructure,” to provide federal lands and resources for AI data centers; and “Promoting the Export of the American AI Technology Stack,” to create and implement the “American AI Exports Program.”
These measures represent a continuation of the administration’s outspoken efforts to reduce AI innovation roadblocks and avoid heavy-handed AI governance regulation. While widely supported by the AI industry, the approach will likely garner opposition from consumer groups and state regulators.
Accelerating Innovation
The plan notes that integrating AI technology is often difficult due in part to “a complex regulatory landscape, and a lack of clear governance and risk mitigation standards.” It seeks to facilitate such integration through regulatory sandboxes, or “AI Centers of Excellence,” to be established nationwide, allowing industry to “rapidly deploy and test AI tools while committing to open sharing of data and results.”
The administration is also using the plan to advance broader political and policy objectives. The Department of Commerce and the National Institute of Standards and Technology (NIST) are directed to remove references to “misinformation,” climate change, and diversity, equity, and inclusion in the NIST AI Risk Management Framework. Federal procurement guidelines must now be adjusted to ensure that any government-used LLM is “objective and free from top-down ideological bias.”
Building American AI Infrastructure
A well-publicized (and controversial) effect of AI proliferation is the technology’s reliance on data centers, which consume substantial amounts of energy and take up vast areas of land. The plan supports an expedited permitting process for such data centers to “further promote” rapid development of AI technologies. Relatedly, it also recommends upgrades to the U.S. electrical grid to support future energy-intensive industries and directs the Department of Defense and NIST to develop new technical standards for high-security AI data centers. Finally, the effort seeks to identify and properly train an increased number of workers in trades that support AI infrastructure, such as electricians and HVAC technicians.
Leading in International Diplomacy and Security
To promote American AI technologies globally, the Department of Commerce and the State Department are to assist American industries in delivering “secure, full-stack AI export packages – including hardware, models, software, applications, and standards” to American allies. Companies with such “full stack” AI export programs must comply with pertinent export control frameworks. Further, as China is reportedly spending considerable sums on AI development without the use of Western-made microchips, the plan addresses countering Chinese influence over AI policy development in international governance bodies. It also seeks to strengthen AI controls to prevent U.S. adversary use and address loopholes in existing semiconductor manufacturing export controls.
Takeaways
The U.S. government’s approach differs substantially from the EU, which enacted the “AI Act” in late 2024. The EU AI Act is a comprehensive AI governance law that outlines risk-based regulations of AI systems and allows participating countries to establish AI governing authorities to conduct “market surveillance” of AI utilization and enforce strict AI requirements accordingly. The EU’s consumer-oriented approach to AI regulation mirrors the scope and breadth of other recent technology-based EU regulations, such as the privacy-centric General Data Privacy Regulation (GDPR), and stands in contrast to the business friendly bent of the “AI Action Plan.”
As further evidence of the U.S.’ divergent approach from the EU, the Trump administration will push Congress to revisit the AI “moratorium” stricken from this year’s budget reconciliation bill. That measure would have prevented states from enforcing AI-specific laws for 10 years, essentially eviscerating consumer-oriented AI laws in California, Colorado, Texas, and Utah, as well as pending AI legislation in dozens of other states. In response to that effort, a bipartisan group of 40 state attorneys general sent a letter to Congress opposing the measure, citing state sovereignty and their duty to protect consumers. It is unclear whether a revived federal moratorium push would succeed given previous bipartisan Congressional opposition to the provision. But notably, several state AGs have signaled that they will enforce existing, non-AI specific privacy, consumer protection, and anti-discrimination laws as they relate to AI use, regardless of whether federal law ultimately supersedes state, AI-specific laws.
Considering the above, developers and deployers of AI must take note of the AI Action Plan and position themselves accordingly. Whether navigating export control compliance, meeting federal procurement standards for AI objectivity and transparency, or reducing innovation roadblocks, companies must heed the plan’s mandates to ensure compliance and capitalize on emerging opportunities. Yet, businesses must also continue to adhere to a patchwork of state AI regulation and existing consumer protection laws, often with complex and varied requirements, in the absence of a federal AI provision that specifically preempts state regulation. Engaging relevant internal stakeholders and consulting experienced outside counsel will help mitigate regulatory and other legal exposure within an ever-changing AI landscape.
Troutman Pepper Locke State Attorneys General Team
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Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation. |
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Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation. |
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Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies. |
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Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes. |
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Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education. |
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Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation. |
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Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests. |
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Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs. |
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Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology. |
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Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries. |
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Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy. |
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Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals. |
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Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based on the West Coast. She routinely counsels clients on a variety of state and federal regulatory matters, with a particular emphasis on consumer protection and data privacy matters. |
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Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting. |
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Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general. |
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Philip Nickerson Philip represents clients in sectors such as financial, tech, real estate, and energy in a range of litigation matters. He is experienced in matters involving trade secrets, government investigations, commercial contracts, construction and product defect. |
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Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues. |
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Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities. |
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Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review. |
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Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues. |
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Timothy Shyu Timothy is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. |
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Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals. |
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Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general. |
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Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department. |