New AI Regulation Law Protects Consumers, but Could Slow Texas’ Tech Growth
On July 17, 2025, Texas lawmakers surprised many by passing the Texas Responsible Artificial Intelligence Governance Act (TRAIGA). This new legislation aims to protect consumers while imposing robust regulations on artificial intelligence (AI) technologies. It stands in stark contrast to California, which failed to enact a similar law.
Overview of TRAIGA
TRAIGA is designed to impose thorough expectations on businesses that utilize AI, focusing on consumer protection and transparency. The bill takes effect in January and is seen as a pioneering move in the realm of AI legislation, with few states having passed comparable laws.
Matthew Murrell, an AI law expert and instructor at the University of Texas, has described TRAIGA as “shockingly good” from a pro-consumer and pro-privacy standpoint. He emphasizes that the bill places human-centeredness at its core, which requires companies to consider the implications of AI systems on the public before development.
Key Provisions
The act includes several important provisions aimed at ensuring responsible AI use:
- Transparency: Companies are mandated to disclose when AI is used in their products and services.
- Prohibitions: Certain AI activities are banned, such as those that encourage self-harm or involve biometric data usage.
- Texas AI Council: A council will be created to evaluate AI use, offer legislative guidance, and issue reports. This council will consist of public members appointed by state leaders.
Innovation vs. Regulation
While TRAIGA holds businesses accountable, it also allows for innovation. The bill creates a regulatory sandbox program that grants legal protections to companies testing AI systems under government oversight. This approach acknowledges the rapidly evolving nature of AI and aims to balance regulation with business interests.
Impact on Businesses and Consumers
Despite the new regulations, average consumers are unlikely to notice significant changes. Large companies, however, will need to reassess their practices to comply with the new law. Murrell notes that TRAIGA challenges Texas’s reputation as a pro-business and anti-regulation state, especially in light of its emergence as a tech hub over the past two decades.
As Texas implements these new regulations, the narrative that companies are flocking to Texas for fewer regulations is called into question. The passage of TRAIGA may serve as a model for other states looking to regulate AI in the absence of federal guidance.
The Federal Landscape
As states like Texas and California navigate AI regulation, the federal government has largely remained silent. Current congressional debates include a proposed federal moratorium on AI, which would prevent nationwide legislation for a decade. This moratorium aims to allow AI technologies to develop further, enabling U.S. companies to compete globally.
However, concerns have arisen regarding the short-sightedness of this approach. With the federal government stepping back, states must take the initiative to enact their own regulations, increasing the likelihood that TRAIGA will influence future legislation across the nation.
Conclusion
TRAIGA marks a significant step forward in consumer privacy and AI governance. For consumers focused on their privacy rights, this legislation represents a noteworthy victory in the ongoing dialogue about the ethical implications of artificial intelligence.
