State Legislatures Consider New Wave of 2025 AI Legislation
State lawmakers are considering a diverse array of AI legislation, with hundreds of bills introduced in 2025. Many of these legislative proposals fall into several key categories:
- Comprehensive Consumer Protection
- Sector-Specific Legislation on Automated Decision-Making
- Chatbot Regulation
- Generative AI Transparency Requirements
- AI Data Center and Energy Usage Requirements
- Frontier Model Public Safety Legislation
These categories represent just a subset of current AI legislative activity, illustrating the major priorities of state legislatures and highlighting new AI laws that may be on the horizon.
Consumer Protection
Lawmakers in over a dozen states have introduced legislation aimed at reducing algorithmic discrimination in high-risk AI or automated decision-making systems used to make “consequential decisions.” This approach embraces the risk- and role-based strategy of the Colorado AI Act. Generally, these frameworks would establish developer and deployer duties of care to protect consumers from algorithmic discrimination, requiring reporting of risks or instances of algorithmic discrimination to state attorneys general. They would also mandate notices to consumers and disclosures to other parties, establishing consumer rights related to the AI system.
For instance, Virginia’s High-Risk AI Developer & Deployer Act (HB 2094) follows this model and passed out of Virginia’s legislature this month.
Sector-Specific Automated Decision-Making
Over a dozen states have introduced legislation to regulate the use of AI or automated decision-making tools (ADMT) in specific sectors, including healthcare, insurance, employment, and finance. For example:
- Massachusetts HD 3750 would amend the state’s health insurance consumer protection law to require healthcare insurance carriers to disclose the use of AI or ADMT for reviewing insurance claims.
- New York A773 would require banks using ADMT for lending decisions to conduct annual disparate impact analyses and disclose them to the New York Attorney General.
Additionally, states like Georgia (SB 164) and Illinois (SB 2255) would prohibit employers from using ADMT to set wages unless certain requirements are met.
Chatbots
Another key trend in 2025 AI legislation focuses on AI chatbots. Various bills, such as those in Hawaii (HB 639/SB 640), Idaho (HB 127), Illinois (HB 3021), Massachusetts (SD 2223), and New York (A222), would require chatbot providers to inform users prominently that they are not interacting with a human or impose liability on chatbot providers for misleading or deceptive communications.
Generative AI Transparency
State legislatures are also considering regulation of providers of generative AI systems and platforms hosting synthetic content. Bills like Washington HB 1170 and Florida HB 369 would require generative AI providers to include watermarks in AI-generated outputs and provide free AI detection tools for users. Other legislation, such as Illinois SB 1792 and Utah SB 226, would require generative AI owners to display notices informing users of the use of generative AI or warning them that AI-generated outputs may be inaccurate, inappropriate, or harmful.
AI Data Centers & Energy
Lawmakers are addressing the growing energy demands of AI development and related environmental concerns with introduced legislation. For instance, California AB 222 would require data centers to estimate and report the total energy used to develop certain large AI models. Similarly, Massachusetts HD 4192 would require AI developers and operators of greenhouse gas emission sources to monitor, track, and report environmental impacts and mitigations.
Frontier Model Public Safety
Following the passage and subsequent veto of California SB 1047, California State Senator Scott Wiener filed SB 53 to establish safeguards for the development of AI frontier models. Other states are considering legislation to address public safety risks posed by frontier or foundation models, generally defined as AI models meeting certain computational or monetary thresholds. For example, Illinois HB 3506 would require developers of certain large AI models to conduct risk assessments every 90 days and publish annual third-party audits.
Rhode Island H 5224 would impose strict liability on developers of covered AI models for all injuries to non-users that are factually and proximately caused by the covered model.
Although the likelihood of passage for these AI bills remains unclear, any state AI legislation that does pass is likely to have significant effects on the U.S. AI regulatory landscape, especially in the absence of federal action on AI. Monitoring of these and related AI developments is crucial moving forward.
