In a move that blends Silicon Valley libertarianism with Washington realpolitik, President Donald Trump on December 11, 2025, signed Executive Order 14179, "Ensuring a National Policy Framework for Artificial Intelligence."
The directive doesn't just call for a unified federal AI strategy - it wields the purse strings of a $42.45 billion federal broadband program as a cudgel against states daring to impose what the White House deems "onerous" local regulations.
By threatening to withhold Broadband Equity, Access, and Deployment (BEAD) funds - originally enacted under the 2021 Bipartisan Infrastructure Law to bridge the digital divide - Trump's order escalates a simmering battle over AI governance, positioning the federal government as the sole arbiter in a technology poised to redefine economies and societies.
This isn't subtle diplomacy; it's a high-stakes wager on America's AI supremacy. As Trump declared during the Oval Office signing, flanked by tech influencers like David Sacks and Chamath Palihapitiya, "We must have only one rulebook if we are going to continue to lead in AI."
The order revokes elements of his predecessor's AI safety initiatives while directing agencies to sue "problematic" states and condition grants on regulatory compliance, potentially reshaping the 50-state patchwork into a monolithic federal blueprint.
The BEAD Bait-and-Switch: $42 Billion on the Line
At the heart of the executive order is Section 5, which mandates the Secretary of Commerce to issue a policy notice within 90 days, rendering states with conflicting AI laws ineligible for BEAD's non-deployment funds - up to $42.45 billion earmarked for high-speed internet expansion in underserved areas.
Launched in 2023, BEAD has already allocated funds to all 50 states, D.C., and territories, with 29 final proposals approved by December 2025, aiming to connect millions in rural and low-income communities. Yet, as critics note, the program has connected zero households to date due to bureaucratic delays, making it a ripe target for leverage.
The order frames state-level AI rules as existential threats: "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, high-speed connectivity."
Federal agencies must now audit their discretionary grants - spanning education, health, and infrastructure - for similar conditions, potentially starving non-compliant states of billions more. California's Governor Gavin Newsom blasted it as a "con," warning of lawsuits: "President Trump and David Sacks aren’t making policy - they’re running a con."
Targets in the Crosshairs: Colorado and New York Lead the Resistance
The order explicitly calls out laws embedding "ideological bias" or mandating excessive disclosures, zeroing in on progressive strongholds.
Colorado's SB24-205, the nation's first comprehensive AI act signed in May 2024 and delayed to February 1, 2026, requires developers and deployers of "high-risk" AI systems - those used in employment, housing, credit, education, and healthcare - to mitigate algorithmic discrimination.
Defined as any output that unlawfully disadvantages protected classes (e.g., based on race, age, or disability), it demands impact assessments and consumer notifications, earning White House ire as a barrier to innovation.
The postponement to June 30, 2026, via SB 25B-004, stemmed from industry pushback and failed legislative tweaks, but it still positions Colorado as a flashpoint.
New York's General Business Law 349-a, effective November 10, 2025, fares no better. Dubbed the Algorithmic Pricing Disclosure Act, it compels businesses to disclose "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA" for any dynamic pricing influenced by consumer info - targeting "surveillance pricing" in e-commerce and services.
Exempting insurers and subscriptions, it prohibits using protected class data (e.g., ethnicity, gender) for discriminatory hikes, a measure Governor Kathy Hochul hailed as empowering shoppers amid holiday sales. The White House views it as an overreach stifling AI-driven personalization.
These aren't isolated; the order's AI Litigation Task Force, to be stood up by Attorney General Pam Bondi within 30 days, will sue over laws preempted by federal commerce powers or deemed unconstitutional. Sacks, the PayPal co-founder turned AI czar, defended the blitz: "At best, we'll end up with 50 different AI models for 50 different states - a regulatory morass worse than Europe." He clarified exemptions for child safety and data center permitting, but warned of challenges for interstate AI flows.
Echoes of History: Federalism's Fragile Balance
This federal flex harks back to the GOP's long arc - from Lincoln's Union preservation to today's tech-tilted conservatism.
It took 170 years post-Civil War for Republicans to flip the once-solid Democratic South, a transformation cemented by the 1994 "Southern Strategy" and accelerated under Trump.
Now, with AI as the new frontier, the party risks alienating blue-state innovators while courting donors: Big Tech poured millions into Trump's 2024 war chest, including from OpenAI and Meta executives wary of state silos.
X erupted with backlash - "Trump sells out the West to Big AI," one viral post fumed - while supporters cheered the "one rulebook" for startups.
Legal scholars doubt its staying power: Executive orders can't rewrite statutes like the Commerce Clause, and states like Alaska are already mulling countersuits. Yet, by tying BEAD - a bipartisan lifeline - to AI fealty, Trump forces a reckoning: Innovate federally or forfeit connectivity.
The Road to a 'Minimally Burdensome' Future?
The order blueprints a congressional push for preemptive legislation, sparing child protections and procurement but overriding the rest. Sacks envisions "global AI dominance through a minimally burdensome, uniform national policy framework," but detractors like California's AG warn of a "nobility class" for robber-barons.
As the Litigation Task Force gears up and Commerce reviews BEAD eligibility by March 2026, one thing's clear: Trump's gambit isn't just policy - it's a declaration that in the AI arms race, federal firepower trumps state sovereignty. Whether it unites or divides the Union remains the trillion-dollar question.
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Author: Slava Vasipenok
Founder and CEO of QUASA (quasa.io) - Daily insights on Web3, AI, Crypto, and Freelance. Stay updated on finance, technology trends, and creator tools - with sources and real value.
Innovative entrepreneur with over 20 years of experience in IT, fintech, and blockchain. Specializes in decentralized solutions for freelancing, helping to overcome the barriers of traditional finance, especially in developing regions.
