The Future of AI Adoption in U.S. State Governments: A Look Ahead to 2026
State governments across the United States are gearing up to embrace Artificial Intelligence (AI) in unprecedented ways by 2026. However, this anticipated surge in AI adoption comes with a complex web of challenges, especially given the recent executive order signed by former President Donald Trump. Many stakeholders are left questioning how state legislatures will secure necessary safeguards while advancing AI technologies.
The Shift in Federal Policy
When President Trump took office, significant policy shifts were expected, particularly in areas such as technology and regulation. A key moment came in January when he rescinded an executive order from the previous administration that had established a framework for AI risk management. By July, he had outlined his AI Action Plan, which, while ambitious, raised red flags concerning state regulatory authority. In December, Trump took further decisive action through an executive order preventing states from enacting what he described as “onerous AI laws.”
Implications for State Governments
This federal directive is poised to affect states differently based on their existing AI policies. One of the most critical factors to consider is funding—specifically, the potential withholding of federally allocated resources for broadband deployment tied to compliance with these new AI regulations.
For example, Idaho’s Chief Information Officer Alberto Gonzalez has confidently stated that the state’s approach of guidance over governance aligns well with Trump’s directive. He believes that their strategy won’t be adversely impacted. Conversely, other lawmakers view the federal overreach as a troubling infringement on states’ rights to legislate independently.
Colorado in the Spotlight
Colorado’s situation is particularly noteworthy. The executive order called attention to the state for alleged claims regarding a law that supposedly mandates the alteration of truthful AI outputs. However, no such law currently exists. Colorado has been proactive in addressing AI ethics through legislation like the Colorado AI Act (Senate Bill 24-205), aimed at creating a risk management system for combating algorithmic discrimination. Colorado’s CIO, David Edinger, has indicated that their AI working group is likely to propose updates to this legislation in the upcoming January session, leaving the final decision in the hands of state lawmakers.
Colorado Representative Brianna Titone has voiced concerns about the legality of the executive order’s limitations, emphasizing that it may be challenged in court. This sentiment echoes among several stakeholders who see this executive action as exceeding constitutional bounds.
AI Regulation and Global Context
As the U.S. seeks to establish itself as a leader in AI technology, experts warn that Trump’s policies may influence international norms in favor of tech nationalism. A report from Forrester Research cautions that an "AI bubble"—characterized by hype and heavy investment—may burst in 2026, potentially forcing a re-evaluation towards AI solutions that offer measurable return on investment.
Some states are already moving to achieve quick wins with AI applications. Georgia and North Dakota are particularly focused on implementations that can deliver immediate benefits, while other states explore more sophisticated solutions like agentic AI—technology that enables autonomous decision-making.
Pioneering Agentic AI Tools
State leaders are beginning to investigate how agentic AI can transform public services. For instance, Alaska is considering the technology for its digital government portal, Indiana is looking to incorporate it within the notary licensing process, and Virginia is exploring its use to streamline regulatory reviews. Utah CIO Alan Fuller has expressed strong optimism about the potential productivity gains agentic AI could bring to state government operations.
Despite this enthusiasm around innovation, fundamental questions remain about the states’ authority to craft specific AI regulations in light of the recent executive order. U.S. Rep. Ted W. Lieu articulated that an executive order cannot create law or override state authority, a sentiment echoed across party lines. Florida’s Republican Governor Ron DeSantis has also voiced plans to pursue an AI Bill of Rights, championing the idea that states should remain free to legislate.
Current Landscape of State AI Regulation
As of now, uncertainty looms over what AI policymaking will look like in 2026. Many state and local leaders recognize the urgency to adapt and model responsible governance for AI deployment. The NewDEAL Forum articulates this need for citizen-centered AI governance in light of unpredictable federal guidelines.
Amidst this backdrop, states, including New York, are forging ahead with independent AI legislation. Just recently, New York’s governor signed a new law establishing safety requirements and an oversight office for AI technologies.
The conversation around AI adoption at the state level is just beginning. As 2026 approaches, stakeholders are navigating a landscape punctuated by innovation, regulatory challenges, and an ongoing debate over the rightful balance of power between state and federal governance on AI.
