Virginia’s Governor Vetos AI Bill
On March 24, 2025, Virginia’s Governor vetoed House Bill (HB) 2094, known as the High-Risk Artificial Intelligence Developer and Deployer Act. This bill aimed to establish a regulatory framework for businesses developing or using “high-risk” AI systems.
The Governor’s veto message emphasized concerns that HB 2094’s stringent requirements would stifle innovation and economic growth, particularly for startups and small businesses. The bill would have imposed nearly $30 million in compliance costs on AI developers, a burden that could deter new businesses from investing in Virginia. The Governor argued that the bill’s rigid framework failed to account for the rapidly evolving nature of the AI industry and placed an onerous burden on smaller firms lacking large legal compliance departments.
The veto of HB 2094 in Virginia reflects a broader debate in AI legislation across the United States. As AI technology continues to advance, both federal and state governments are grappling with how to regulate its use effectively.
Federal Level Legislation
At the federal level, AI legislation has been marked by contrasting approaches between administrations. Former President Biden’s Executive Orders focused on ethical AI use and risk management, but many of these efforts were revoked by President Trump this year. Trump’s new Executive Order, titled “Removing Barriers to American Leadership in Artificial Intelligence”, aims to foster AI innovation by reducing regulatory constraints.
State Governments Taking the Lead
State governments are increasingly taking the lead in AI regulation. States like Colorado, Illinois, and California have introduced comprehensive AI governance laws. The Colorado AI Act of 2024, for example, uses a risk-based approach to regulate high-risk AI systems, emphasizing transparency and risk mitigation. While changes to the Colorado law are expected before its 2026 effective date, it may emerge as a prototype for other states to follow.
Takeaways for Business Owners
1. Stay Informed: Keep abreast of both federal and state-level AI legislation. Understanding the regulatory landscape will help businesses anticipate and adapt to new requirements.
2. Proactive Compliance: Develop robust AI governance frameworks to ensure compliance with existing and future regulations. This includes conducting risk assessments, implementing transparency measures, and maintaining proper documentation.
3. Innovate Responsibly: While fostering innovation is crucial, businesses must also prioritize ethical AI practices. This includes preventing algorithmic discrimination and ensuring the responsible use of AI in decision-making processes.
