In December 2025, President Trump signed Executive Order 14365 with one clear mission: crush state AI regulations before they could slow down the industry. The order created an AI Litigation Task Force at the Department of Justice with, and I quote, the 'sole responsibility' of challenging state AI laws that conflicted with the administration's pro-industry stance.

Four months later, the Task Force has not filed a single lawsuit. Not one.

Meanwhile, the states have been busy. Oregon and Idaho both signed chatbot protection laws into law last week. Tennessee signed an AI healthcare bill. Colorado's AI Act is active. New York's RAISE Act is moving forward. California's governor issued an executive order on AI procurement standards that is setting a de facto national standard because, well, everybody sells to California.

The administration did publish its 'National Policy Framework for Artificial Intelligence' on March 20, a seven-part document that recommends Congress 'preempt state laws that impose undue burdens.' But recommendations are not laws. And Congress, which has introduced 47 AI bills without passing a single one, is not exactly moving with urgency.

Here is what is actually happening: the Commerce Department was supposed to publish an evaluation of state AI laws by March 11, identifying which ones should be referred to the Task Force for legal challenge. That evaluation has not been made public. Multiple agency deadlines from the executive order have passed without visible action.

The states are winning this fight by default. Not because they are right on every policy detail, but because they are the only ones actually governing. While the federal government writes memos about writing memos, Oregon is protecting kids from manipulative chatbots and California is setting AI procurement standards that every vendor will have to meet.

AI companies wanted federal preemption to avoid a patchwork of state regulations. Instead, they got a patchwork of state regulations AND a federal government that cannot execute its own plan. The worst of both worlds.

The practical advice for every AI company right now: stop waiting for Washington to save you. The executive order signals intent, but the legal fights will take years. The states already moved. Comply or get sued, and not by the feds.