The White House circulated a draft executive order titled “Eliminating State Law Obstruction of National AI Policy” signaling a push toward a single federal framework for AI and a rollback of state-by-state mandates. The draft directs the Attorney General, the Commerce Department, the FCC, and the FTC to challenge or displace certain state AI laws, especially those imposing disclosure, reporting, or output-altering requirements. Colorado’s AI Act and California transparency measures are noted as examples of the state patchwork the order targets. 

How the draft EO would work
The order would not itself set comprehensive federal AI rules. Instead, it would mobilize agencies to create a pathway for federal primacy:

• The Attorney General would form an AI Litigation Task Force to challenge state AI laws viewed as conflicting with federal policy. 

• The Commerce Secretary would identify “onerous” state AI provisions for possible challenge. 

• Federal funding levers would be used to discourage conflicting state approaches.

• The FCC would consider a federal reporting and disclosure standard for AI models that could preempt conflicting state rules. 

• The FTC would issue a policy statement under Section 5 explaining when state laws that require altering “truthful outputs” are preempted as unfair or deceptive.

Why this matters now
Companies face diverging state AI rules on disclosures, labeling, consumer interactions, and recordkeeping. The draft EO points to an emerging federal baseline that could streamline obligations. Even if finalized, state requirements will not vanish overnight so businesses should plan for near-term dual tracking: maintain state compliance while preparing for a potential federal overlay. 

What to do now

• Tighten product claims. Align marketing statements, documentation, and user-facing FAQs to reflect actual model capabilities and guardrails, anticipating an FTC focus on “truthful outputs.” 

• Update contracts. Ensure developer, deployer, and provider agreements include standardized IP representations, permitted uses, synthetic media handling, and consumer interaction disclosures that can adapt to a federal standard.

Bottom line
The draft EO signals a shift toward a national AI rule set aimed at preempting parts of the state patchwork, especially disclosure and “output alteration” mandates. This federal consolidation will have practical effects on disclosure mechanics and regulatory but will not change the fundamentals of IP risk.