California Governor Gavin Newsom sharply criticized President Donald Trump's artificial intelligence executive order within hours of its Thursday evening release, calling the directive an example of "grift and corruption" rather than genuine innovation policy. The governor's statement directly challenged Trump's attempt to block states from independently regulating AI technologies.
"President Trump and David Sacks aren't making policy – they're running a con," Newsom said, referencing Trump's AI adviser and crypto "czar." "Every day, they push the limits to see how far they can take it." The rebuke sets up a potential legal and political confrontation between the nation's most populous state and the federal government over AI governance.
Federal Preemption Battle
Trump's executive order seeks to establish federal preemption over AI regulation, preventing states from implementing their own rules governing artificial intelligence development and deployment. The directive represents a significant shift in regulatory authority, centralizing AI policy decisions at the federal level rather than allowing states to experiment with different approaches.
California has led state-level AI regulation efforts, with legislators proposing bills addressing algorithmic discrimination, deepfakes, and AI safety requirements. Newsom himself signed several AI-related bills in 2024 while vetoing others he deemed overly restrictive. The state's technology industry concentration gives California outsized influence in shaping AI policy nationwide.
Sacks' Controversial Role
Newsom's specific mention of David Sacks highlights concerns about conflicts of interest in Trump's AI policy team. Sacks, appointed as both AI adviser and cryptocurrency czar, maintains extensive technology industry investments and relationships that critics argue create bias toward industry-friendly regulation over consumer protection.
Sacks has advocated publicly for minimal AI regulation, arguing that heavy-handed rules would disadvantage American companies against Chinese competitors. This position aligns with major AI companies' preferences but conflicts with consumer advocates and AI safety researchers calling for stronger oversight.
State vs. Federal Authority
The executive order's attempt to preempt state regulation raises constitutional questions about federalism and state powers. While federal law generally supersedes conflicting state laws under the Supremacy Clause, states retain broad authority to regulate within their borders when federal law doesn't explicitly preempt them.
California has successfully defended state-level technology regulations against federal preemption challenges in areas including data privacy and vehicle emissions standards. The state's legal team likely views AI regulation as similar territory where state authority remains valid absent explicit congressional action.
Political and Industry Implications
The clash between Newsom and Trump over AI regulation reflects broader tensions about technology governance and political power. California's Democratic leadership has prioritized consumer protection and AI safety, while Trump's approach favors industry growth and international competitiveness.
Technology companies face conflicting pressures from this regulatory uncertainty. While many prefer uniform federal rules over navigating different state requirements, they also want minimal restrictions on AI development and deployment. The Trump administration's industry-friendly stance appeals to companies concerned about compliance costs.
Regulatory Uncertainty Ahead
The confrontation creates significant uncertainty for AI companies operating in California and nationwide. If the state proceeds with independent regulation despite the executive order, companies may face conflicting requirements or need to challenge state laws in court.
Legal experts anticipate California could sue to block federal preemption, arguing the executive order exceeds presidential authority without congressional authorization. Such litigation could take years to resolve, leaving AI regulation in limbo as the technology rapidly advances.
For the AI industry, the dispute underscores ongoing governance challenges as capabilities outpace regulatory frameworks. Whether federal preemption or state experimentation produces better AI oversight remains contested, with stakeholders including companies, researchers, advocates, and policymakers holding divergent views on optimal approaches.
