State Technology Offices Navigate Challenges Under Second Trump Term

In 2025, state technology offices faced a challenging landscape characterized by the need to modernize outdated systems, integrate AI-powered tools, tackle cybersecurity threats, and deliver user-friendly digital services—all while operating within tight budget constraints. Adapting to the evolving priorities of the federal government under the second Trump administration added another layer of complexity for state tech officials.

Throughout the year, various significant developments influenced state tech agencies, prompting adjustments in strategy and execution. From the enactment of a moratorium on state AI laws to sweeping changes in federal broadband policies, the tech landscape was anything but stable. Here are the top five tech stories shaping state governments in 2025.

A Pause on State AI Regulations

The year 2025 saw a major shift in AI policy as President Donald Trump issued an executive order halting state AI legislation. Previously, states had made significant strides in drafting AI-related laws, but these efforts were cast into uncertainty with the introduction of the moratorium. This move, part of the larger One Big Beautiful Bill, stirred opposition from state leaders and legislative bodies, who argued that state-level protections are necessary, especially amidst potential risks such as deepfakes and scams targeting vulnerable populations.

Despite the pushback, including a letter from 36 state attorneys general, the debate over the moratorium's legality and its effect on technological innovation continues. Proponents argue it reduces compliance costs for businesses, yet the full ramifications are expected to unfold in 2026.

Revamping the BEAD Program

Changes to the Broadband Equity, Access, and Deployment program were another critical story for states this year. Changes introduced by Commerce Secretary Howard Lutnick aimed to remove restrictions perceived as burdensome, including labor and climate reporting requirements. The new guidelines, which dropped the "fiber first" preference, created opportunities for tech like low-Earth orbit satellites.

However, the implementation of these updated rules faced hurdles. The Government Accountability Office scrutinized the process, finding that the new rules had not been properly submitted to Congress, raising questions about their legal standing.

Leadership Changes in State Tech Offices

Leadership transitions in state tech offices also marked 2025. Eleven states experienced changes in chief information officers, with some transitions linked to gubernatorial changes and retirements. While some transitions were clearly communicated, others, like in Pennsylvania, occurred under less transparent circumstances, adding to organizational challenges.

Notably, new CIO appointments were made in states like North Carolina, Tennessee, Kentucky, and Indiana, reshaping tech priorities and strategies in these regions.

Challenges in Cybersecurity Funding

Federal support for state and local cybersecurity efforts waned in 2025, with significant funding cuts to essential programs like the Elections Infrastructure Information Sharing and Analysis Center. Additionally, changes to the State and Local Cybersecurity Grant Program restricted the use of funds for certain cybersecurity services, leading states to focus on self-reliance.

Efforts were underway to stabilize funding, including the House's passage of the PILLAR Act, but future federal support remains uncertain.

Federal Government Shutdown Repercussions

The fallout from the federal government shutdown this fall presented major challenges for state agencies. This 43-day shutdown, driven by a deadlock over the Affordable Care Act subsidies, disrupted federal support, affecting programs like the Supplemental Nutrition Assistance Program. States had to adapt quickly, reassessing plans and funding strategies as they dealt with delayed federal reimbursements.

The shutdown forced states to reevaluate their dependence on federal partnerships, with potential long-term implications extending into the upcoming year.