Draft Trump EO Would Tie States' Non-Deployment BEAD Funding to AI Laws Preemption
A draft White House executive order that was circulating Wednesday night would resurrect a scuttled legislative bid to preempt nonfederal AI laws by making states ineligible for some allocated funding from the $42.5 billion BEAD program if they passed their own AI measures. The draft EO would require NTIA to issue a policy notice within 90 days “specifying the conditions under which States may be eligible for remaining [BEAD funding] that was saved through my Administration’s ‘Benefit of the Bargain’ reforms,” more commonly known as non-deployment funds estimated to total $20 billion.
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President Donald Trump’s draft order said NTIA’s policy notice “must provide” that states whose AI laws conflict with administration goals to “enhance America’s global AI dominance through a minimally burdensome, uniform national framework” will be ineligible for non-deployment funding. NTIA’s notice “must also describe how a fragmented State regulatory landscape for AI threatens to undermine BEAD-funded deployments, the growth of AI applications reliant on high-speed networks, and BEAD’s mission of delivering universal” connectivity, the draft order said.
The draft calls for NTIA to base its funding decisions on a proposed Commerce Department evaluation of whether states’ AI laws conflict with the administration’s goals, including “laws that require AI models to alter their truthful outputs, or that may compel AI developers or deployers to disclose or report information in a manner that would violate the First Amendment or any other provision of the Constitution.” It would also direct NTIA to factor in decisions by a proposed DOJ task force that could challenge state AI laws in consultation with the White House Office of Science and Technology Policy and other agencies.
The draft would direct FCC Chairman Brendan Carr to begin a proceeding within 90 days “to determine whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.” It also directs the FTC to “issue a policy statement on the application of the FTC Act's prohibition on unfair and deceptive practices … to AI models.”
“Until officially announced by the [White House], discussion about potential executive orders is speculation,” a Trump administration official said.
The proposed order somewhat mirrors an unsuccessful Senate-side bid for the reconciliation law to allocate $500 million via BEAD in FY 2025 to construct and deploy AI infrastructure. That legislation would have required governments receiving the new BEAD funding to pause enforcing state-level AI rules. Critics claimed the proposal endangered states’ entire BEAD funding eligibility. The Senate ultimately voted 99-1 in July to strip out the AI preemption proposal entirely.