Executive Order Highlights Importance of AI Governance
A recent executive order could be a powerful step toward a unified U.S. AI regulatory framework.
Unified Approach to AI Regulations
The administration has signaled the desire for one approach to AI regulations across the nation rather than a patchwork of state laws. Furthermore, the administration is pushing for any regulation to be “minimally burdensome” to avoid slowing innovation and investment in AI by the private sector. To this end, it seeks to evaluate and potentially challenge any state laws as unconstitutional or in conflict with federal regulations, advocating for a new federal framework to supersede any state law once enacted.
Evaluating State Laws
The White House is analyzing laws that impose “excessive regulation” or alter the “truthful outputs” of AI models, citing Colorado’s Senate Bill 24-205, also known as the Colorado Anti-Discrimination in AI law, as an example. This law was approved in 2024 and goes into effect on Feb. 1, 2026.
Impact on Funding
The executive order contemplates restricting grant funding, specifically from the Broadband Equity Access and Deployment (BEAD) grant program, if state laws do not align with the proposed federal framework. While executive orders do not have direct authority over states, non-alignment could meaningfully impact federal funding.
Leveraging an AI Governance Framework
It is imperative for organizations to have a robust AI governance framework to thoughtfully implement and deploy AI tools, especially when navigating compliance amid a shifting regulatory landscape. Many organizations leverage the U.S. Department of Commerce’s National Institute of Standards and Technology’s (NIST) AI Risk Management Framework (RMF) as a starting point. RSM referenced the NIST AI RMF in developing our Responsible AI Governance Framework, as well as elements of several additional leading resources.
Evaluating AI Systems for Bias
The NIST AI RMF suggests evaluating AI systems for “harmful bias” and instituting approaches for bias management. Organizations must carefully weigh the goals and impacts of bias management, as currently defined, in their governance strategies and in the development and deployment of AI tools. More importantly, they must adapt these strategies to keep pace with this rapidly evolving field.
The Takeaway
While Congress may take time to develop and pass a comprehensive national AI framework, organizations should not pause their own AI governance efforts. State laws and international regulations will continue to be introduced and modified, and AI governance should be thoughtfully incorporated into an organization’s risk management practices. AI regulation is shifting quickly, but so is AI capability. RSM’s investment in responsible AI, agentic workflows, and modern digital platforms gives middle market leaders the structure they need to innovate with confidence.
Contact our team to learn more about the AI executive order and its potential effects on your organization, how to implement an effective governance framework, or how to successfully evaluate AI risk in your organization.
