Trump AI Action Plan Proposes Defunding States With Regulations

July 23, 2025, 5:55 PM UTC

States with laws regulating artificial intelligence could lose federal funding under a proposal released on Wednesday by President Donald Trump.

“The Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds,” reads the action plan document, which includes dozens of recommendations to encourage development of the emerging technology.

Trump aims to minimize AI regulations to make the US more competitive against China while downplaying many of the potential threats from automation in the plan. The plan also revives fears that the federal government will preempt state AI laws ...

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