AI company executives argue that national regulations could slow innovation and hinder America's competition for industry dominance with China, where companies are pouring billions of dollars into the technology.
The BBC works with AI companies OpenAI, Google, Meta, We received a comment from Anthropic.
However, there are also opposing opinions to this announcement.
California, home to some of the world's biggest technology companies, already has its own AI regulations.
California Governor Gavin Newsom, a vocal critic of President Trump, issued a strongly worded statement in response to the executive order, accusing the president of corruption.
“Today, President Trump continued his ongoing dissatisfaction with the White House and enriched himself and his allies with a new executive order seeking to preempt state laws that protect Americans from unregulated AI technology.”
Earlier this year, Newsom signed a bill requiring the largest AI developers to develop plans to limit the risks arising from their AI models.
States such as Colorado and New York have also passed laws regulating the development of the technology.
Newsom said the law sets standards for U.S. lawmakers to follow.
Other critics of Trump's executive order say state laws are needed in the absence of meaningful guardrails at the federal level.
“Taking away the right of states to enact their own AI safeguards undermines states' fundamental right to put adequate guardrails in place to protect their residents,” Julie Scelfo of the advocacy group Mothers Against Media Addiction said in a statement.
