It seems like everywhere you look, artificial intelligence (“AI”) is being talked about. It no longer carries that stigma that it is just for tech giants. Businesses across industries are integrating AI into their operations. While there is no single federal AI law yet, state lawmakers are responding. If your business is using or buying AI tools, some of these laws might affect your business.
Federal Law
Although there is no single comprehensive federal AI law, it is worth mentioning that President Trump issued Executive Order 14179 in January 2025 titled “Removing Barriers to American Leadership in Artificial Intelligence.” This revoked certain existing AI directives and policies that “act as barriers to American AI innovation.” It also mentions that an action plan is on the horizon. What AI legislation will be enacted is still unclear.
State Laws – This list includes highlights of select state AI laws and is not comprehensive. The United States Senate is considering a bill that could potentially block states from enacting AI regulations for ten years. In the meantime, it is likely that other states will enact their own AI laws affecting businesses.
California – California has enacted several regulations regarding AI, many these affect how businesses operate.
Notably, AB 2013, the “Generative Artificial Intelligence Training Data Transparency Act” adds requirements of a generative AI-developer to make certain disclosures that include information about data sets used to train their models. This could affect AI developers, business AI projects, and SaaS companies. This is set to take effect on January 1, 2026.
Additionally, California enacted the “California AI Transparency Act” that will go into effect January 1, 2026. This will mandate certain providers to make available free AI detection tools and to embed disclosures that would identify the content as AI generated.
Colorado – Colorado enacted the first comprehensive AI legislation, titled the “Colorado AI Act,” effective early 2026. This puts guardrails on all deployers of high-risk AI systems and developers, such as implementing risk management policies and notifying consumers about risks. Businesses that use high-risk AI will need to implement the required policies.
New York – New York is considering legislation to help regulate AI. However, New York City has implemented “Local Law 144” that focuses on employers that use AI and automated employment decision tools in hiring. This applies to all employers that hire in New York City.
Tennessee – Tennessee enacted the “Ensuring Likeness Voice and Image Security Act” also known as the “ELVIS Act.” This bill helps to protect an individual’s name, photograph, voice, or likeness against unauthorized AI simulations. If your business is in the music industry, it is likely that your current contracts might need revising.
Texas – Texas enacted the “Texas Responsible AI Governance Act” and goes into effect in 2026. This will outline a framework of specific prohibitions on AI use and not just high-risk AI. For now, many of the provisions only apply to government entities. However, there are certain prohibitions that might apply to businesses that provide AI content.
Utah – Utah has several AI laws, but notably, the “Utah Artificial Intelligence Policy Act” requires businesses to make certain disclosures to consumers when they are interacting with generative-AI. The law defines what businesses and occupations apply.
What this Means for Your Business
AI can be beneficial for your business and can streamline processes, but it is important to make sure that you do so safely and legally. With different states enacting different laws, it is critical to conduct an AI regulatory audit in any state where you are doing business to make sure that your business is compliant. If you already using AI, your business should have in place AI governance policies. By doing so early, your business will not only stay compliant, but it will also build more trust with transparency for consumers.
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