The past year set up a clear clash between federal deregulatory efforts and state-level AI rulemaking, and 2026 is poised to be the year that conflict materializes in earnest. The Trump Administration signaled a strong preference for scaling back AI-specific rules while exploring avenues to preempt state and local measures, even as a growing number of states moved forward with their own frameworks. In short, 2025 laid the groundwork, and 2026 is likely to deliver the confrontation.
On the federal side, the Administration’s posture included both legislative and policy initiatives aimed at limiting state restrictions on AI. Although a proposed 10-year moratorium on enforcing state AI laws was removed during negotiations over the One Big Beautiful Bill Act, the America’s AI Action Plan soon followed, instructing agencies to consider using preemption to curb “burdensome” state AI regulations. In the final weeks of 2025, the White House issued an executive order, Ensuring a National Policy Framework for Artificial Intelligence (the “Executive Oder”). The Executive Orderdirects the U.S. Attorney General to establish an AI Litigation Task to challenge state AI laws deemed unconstitutional or preempted and tasks the Administration with developing a national AI legislative framework that would preempt conflicting state rules.
States, however, did not stand still. California’s SB 53 established a first-in-the-nation set of standardized safety disclosure and governance obligations for developers of frontier AI systems, underscoring state willingness to regulate despite federal headwinds. Colorado’s Anti-Discrimination in AI Law remained intact through the 2025 session and is scheduled to take effect in June 2026, setting a near-term compliance deadline that will shape risk assessments and product planning. Even traditionally deregulatory states like Texas pursued aggressive enforcement under existing biometric laws against alleged AI-driven facial recognition practices.
Looking ahead, expect 2026 to feature litigation over the scope of preemption, increased enforcement actions from federal agencies, and a push toward a federal legislative framework, alongside continued state innovation in AI governance. Despite the uncertainty, companies should continue to comply with applicable state AI laws because the Executive Order itself cannot overturn state law. Only Congress and the courts have the power to do so, and until then, state laws remain enforceable. For companies, that means preparing for a two-track reality: monitor and implement state obligations while tracking federal moves that could reshape, narrow, or delay those obligations. The result is likely to be a dynamic, contested compliance environment throughout 2026, rather than quick regulatory convergence.