Trump Signs AI Executive Order Impacting States' Non-Deployment BEAD Money
President Donald Trump signed off Thursday night on an executive order that would direct NTIA to potentially curtail non-deployment funding from the $42.5 billion BEAD program for states that the Trump administration determines have AI laws that are overly burdensome. Some estimates have found that $20 billion in BEAD funding qualifies as non-deployment money. Trump's order is identical to a draft proposal, circulated in November, that drew significant bipartisan opposition.
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The order requires 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 would also order the FTC to “issue a policy statement on the application of the FTC Act's prohibition on unfair and deceptive practices … to AI models.”
Trump directed 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, based on evaluations of states’ AI laws. The evaluations include a Commerce Department review of whether states’ AI statutes conflict with the administration’s goals. That would include “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.”
The order also directs 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. Trump said NTIA’s policy notice must render a state ineligible for non-deployment BEAD funding if its AI laws conflict with administration goals to “enhance America’s global AI dominance through a minimally burdensome, uniform national framework.” 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.
“We have to be unified,” Trump said during a signing ceremony for the order. “China is unified because they have one vote and that’s President Xi [Xinping].” The U.S. has “a different system, but we have a system that’s good. But we only have a system that’s good if it’s smart.” Commerce Secretary Howard Lutnick, Senate Commerce Committee Chairman Ted Cruz, R-Texas, and White House AI czar David Sacks attended the signing.
California Gov. Gavin Newsom (D) swiftly derided Trump's order. Trump and Sacks “aren’t making policy – they’re running a con,” Newsom said in a statement. “And every day, they push the limits to see how far they can take it. California is working on behalf of Americans by building the strongest innovation economy in the nation while implementing commonsense safeguards and leading the way forward.”