Politico Tech – "Why Trump is fighting states over AI"

Date: December 11, 2025
Host: Stephen Overly
Guests: Gabby Miller and Brendan Bordelon (Politico technology reporters)

Episode Overview

This episode examines the growing battle between the federal government—specifically the Trump administration—and U.S. states over who gets to regulate artificial intelligence. With the White House reportedly days away from issuing an executive order that would ban state-level AI laws, host Stephen Overly and Politico tech reporters Gabby Miller and Brendan Bordelon break down how we reached this moment, the political dynamics at play, why the tech industry is both pushing for and nervous about a federal preemption, what precedent exists, and what the future may hold for both industry and lawmakers.

Key Discussion Points & Insights

1. The Road to a Federal Moratorium on State AI Laws

• Congressional Failures:
  • Early 2024: Sen. Ted Cruz’s attempt to attach a 10-year moratorium on state AI laws to a Trump-backed bill failed due to the Byrd rule, as it lacked a funding provision.
  • Cruz tried tying AI preemption to state broadband (SPEED) funding; that also failed after pushback from Sen. Marsha Blackburn (concerns over state ability to protect children online).
  • GOP House leaders later surprised many (including Senate Commerce leaders) by considering AI preemption in the National Defense Authorization Act, but this too was set aside.
• Executive Order Emerges:
  • Frustrated with legislative inaction, President Trump announced on Truth Social his intent to create a “single federal standard” for AI—effectively a moratorium on state AI regulation, details of which were still unclear at recording.
  • Quote: “Trump said on Truth Social earlier this week that he was going to issue an executive order that basically created a national, single federal standard for AI, which is what we can expect to call an AI moratorium.” — Gabby Miller [02:41]

2. Who Wins and Loses Under Federal Preemption?

• Industry Perspective:
  • Ideally, tech companies want no regulation, but given political will, they prefer light-touch federal rules in exchange for stopping stricter state laws.
  • Some Democrats and even skeptics of AI might accept moderate federal regulation in return for nationwide consistency.
• Factions:
  • Maximalists want sweeping bans on regulation (e.g., Andreessen Horowitz, David Sacks).
  • Others demand robust regulation at both levels.
  • Industry’s real fear: a future, more aggressive regulatory environment if they don’t act now.
  • Quote: “By and large, I think most of the tech industry would like to see some sort of compromise on AI regulation, which...would be something on kids safety and something on frontier AI safety...” — Brendan Bordelon [05:09]

3. Is AI Different from Other Tech Policy Patchworks?

• The “patchwork” argument is familiar; the tech industry has managed state-by-state rules in areas like data privacy before.
  • Example: After failing to preempt California’s landmark privacy laws, tech lobbyists promoted industry-friendly privacy bills in other states, limiting the impact of California’s strict approach.
  • The patchwork isn’t as damaging as argued: tech companies adapt and even shape state laws to their preferences.
• AI’s Distinction: The industry claims AI is uniquely urgent due to national security and U.S.-China rivalry concerns.
  • Quote: “There is very much an effort by the tech lobby to paint AI as a fundamentally different technology from the other things that states have regulated...particularly related to defense, national security…” — Brendan Bordelon [08:29]
  • Quote: “Even if Washington doesn't move on this...I think the AI lobby is going to do a pretty good job of getting what they want out of the states.” — Brendan Bordelon [10:34]

4. State Activity & Backlash to Federal Action

• State Momentum: Over 1,000 AI-related bills were introduced in state legislatures in the last year, though many only mention AI incidentally.
  • Actual “core” AI bills are far fewer.
• Opposition Strengthening: The leaked executive order has energized states—both Republicans and Democrats—who see regulation as vital and now view federal intervention as overreach.
  • Preemption pushes unlikely coalitions (AGs, kids’ advocates, GOP state legislators) into vocal opposition.
  • Quote: “You've seen people come out of the woodwork in the states, Republicans...governors, legislators, saying, hold on, we want to regulate this technology.” — Brendan Bordelon [12:37]
  • Quote: “In some ways, this has actually whipped up more of a frenzy than people initially expected.” — Gabby Miller [14:09]
• Legal Uncertainty: Any executive order is expected to be tied up in court battles, leaving industry in limbo and states active during the uncertainty.

5. Legal and Constitutional Battle Lines

• Federal Authority Arguments: The administration will likely rely on the interstate commerce clause—saying that only the federal government can regulate something that crosses state lines (data, AI models, etc.).
• Agency Involvement: Agencies like the FTC and FCC may be directed to pressure states to back off AI laws, but legal experts doubt this will stand court scrutiny.
  • Industry wants quick clarity but is unlikely to get it.
  • Quote: “A lot of the lawyers I have talked to...say it's going to be a high bar.” — Brendan Bordelon [16:49]

6. Congressional Outlook: Does the Executive Order Move the Needle?

• Potential for More Debate: Growing urgency, new commissions (Democratic AI Commission led by Hakeem Jeffries), and moderate Democrats open to preemption—especially if key carve-outs (child protection, consumer protection) are included.
  • Quote: “I spoke with one of its co chairs, Representative Josh Gottheimer, and he was saying...there are Democrats...willing to maybe get to a yes on preemption.” — Gabby Miller [18:05]
• Political Polarization: Aggressive moves by the White House could freeze compromise, especially in a midterm election year and after missed opportunities like the NDAA.
  • Quote: “I think things are starting to freeze up a little bit...particularly going into the election. And I think Democrats and Republicans alike are going to have a tough time giving the other side a win...” — Brendan Bordelon [20:16]
• Two Views:
  • Gabby sees more debate and some room for a deal.
  • Brendan doubts much happens before 2026 due to election pressures and mounting division.

Notable Quotes & Memorable Moments

• On patchwork regulation and industry claims:
  “I don't think that a patchwork is necessarily as threatening to the industry's bottom line and to innovation, as they like to say, in part because industry has actually become really good at co-opting these state patchworks.”
  — Brendan Bordelon [08:54]

• On polarization around preemption:
  “The opposition, like Brendan said, it's been, you know, Republicans, it's been attorney generals, it's been kid safety advocates...often strange bedfellows.”
  — Gabby Miller [14:13]

• On the future:
  “If there are folks in the White House...willing to give something for AI preemption...then maybe you can get somewhere. But a lot of folks...think that the window is closing pretty fast.”
  — Brendan Bordelon [20:51]

Key Segment Timestamps

• 00:33— Framing: Why an executive order is looming
• 01:40–03:58 — Gabby Miller details failed congressional efforts and the path to an executive order
• 04:33–07:06 — Who gains and loses from preemption? Tech industry, Congress, and competing interest groups
• 07:50–10:59 — The patchwork problem: Is AI different from data privacy and tech’s state lobbying strategies?
• 11:32–14:48 — Breakdown of state-level momentum, the backlash against federal moves, and new state political salience
• 14:48–17:15 — Legal battles: Commerce clause, agency involvement, and likely court action
• 17:35–21:28 — Will the executive order move Congress? Is a compromise likely in 2026?
• 21:25–21:36 — Episode wrap-up

Tone & Style

The conversation is fast-paced, wonky, but accessible—mixing deep policy analysis with anecdotes from Congress and industry. The host pushes for clarity, while the guests add color from their Capitol Hill and industry sources. The mood shifts from informative to skeptical, closing with a classic point-counterpoint.

Summary Takeaway

This episode paints a picture of a government grappling with a new technology it can barely keep up with. The struggle between state and federal authority, industry lobbying, and patchwork regulation is nothing new—but AI’s perceived stakes (from economic competitiveness to national security to child protection) make the current moment unusually heated. Despite a coming White House executive order, expect more legal, political, and legislative drama—with real resolution possibly years away.