On January 20, 2025, President Donald Trump signed an Executive Order revoking 78 executive orders issued by the Biden administration. Among these was the Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (Executive Order 14110). This Biden-era directive tasked over 50 federal entities with implementing more than 100 AI-specific actions, including establishing agency frameworks for federal AI oversight, appointing chief AI officers within agencies, and issuing guidance to address ethical, civil rights, and security concerns.
The revocation of Executive Order 14110 likely marks the beginning of a shift in U.S. AI policy. This development adds complexity to the already intricate web of federal, state, and international regulations governing AI, requiring businesses to contend with an increasingly fragmented and perpetually evolving legislative and regulatory environment.
Key Developments and Implications
1. Transition in Federal AI priorities:
The previous U.S. government did not establish a cohesive federal AI framework or pass comprehensive AI legislation. Instead, it primarily relied on Executive Order 14110 to direct agencies to develop agency specific guidance, rules, and best practices. With its revocation, the Trump administration is expected to chart a new course for federal AI policy. President Trump has highlighted AI as a critical priority, stating the importance of “winning the battle for A.I. superiority, which is key to national security and our nation’s prosperity.” The administration’s approach will likely focus on advancing AI innovation to maintain U.S. leadership in the field and the increasing role of AI in geopolitics.
2. Growing Role of State-Level AI Regulations
In the continued absence of comprehensive federal AI legislation, states are expected to take on a more significant role in regulating AI. States such as California, Colorado, and Tennessee have already passed laws addressing specific AI issues and are likely to expand their regulatory reach. On January 13, 2025, California Attorney General, Rob Banta, issued two legal advisories, reminding consumers of their rights, and advising businesses and healthcare entities who develop, sell, or use artificial intelligence (AI) about their obligations under California law. Although AI technology is developing rapidly, entities must comply with existing California laws, as well as new laws that went into effect on January 1, 2025. Businesses operating domestically must prepare to navigate an increasingly complex patchwork of state-specific requirements.
3. Foreign Regulations Remain Critical:
For global companies, compliance with foreign regulations—most notably the EU AI Act—will remain essential. The Act, which establishes strict standards for AI risk classification, ethics, and data use, is already establishing itself as a key framework for AI governance. Businesses must align with the EU AI Act and other emerging international regulations to maintain access to global markets and ensure compliance with best practices that may influence U.S. state-level regulations.
Recommended Steps for Businesses
To successfully navigate this shifting legislative and regulatory environment, businesses should take proactive steps, including:
1. Strengthen and Prioritize Internal Governance and Risk Management
Create and/or strengthen your internal AI policies and ethical guidelines to promote responsible, transparent, and legally compliant AI use and review your risk assessment and management frameworks to address ethical, legal, and cybersecurity risks associated with AI. You should also prepare for potential litigation or liability issues.
2. Monitor and Comply with Federal and State Regulation and Legislation:
Monitor AI-related legislation and regulatory developments at the federal level as the new administration and Congress introduce novel policies and guidance aligned with their priorities. Additionally, closely monitor state-level legislative developments, with particular attention to key jurisdictions such as California, Illinois, New York, and Colorado. Maintaining consistent vigilance will enable businesses to proactively align their operations and practices with evolving regulatory standards and requirements.
3. Collaborate with Outside Groups:
Work with industry organizations, standards bodies, and other organizations to define voluntary guidelines and practices and stay ahead of evolving expectations.
4. Align with International Frameworks:
For companies with a global footprint, ensure compliance with foreign regulations like the EU AI Act, which will continue to influence international markets and potentially U.S. state laws.
Looking Ahead: The First of Many Changes
The Trump administration’s revocation of Executive Order 14110 fulfills a key campaign promise and signals the initial move in a larger effort to redefine federal AI policy. This shift emphasizes priorities such as advancing domestic AI development, bolstering national security, and enhancing U.S. AI global competitiveness. Businesses must stay adaptable, preparing for potential changes not only in federal AI policy but also in state and international regulations, some of which may arise in direct response to federal policy adjustments. While the federal government refocuses its priorities, companies should act swiftly to position themselves for success in this new era of AI governance. Staying vigilant, proactive, and adaptive will be essential to maintaining compliance, fostering innovation, and mitigating risks in an increasingly complex regulatory framework.
