As artificial intelligence (AI) continues to advance and integrate into various aspects of society, it becomes increasingly necessary for states to regulate or enact legislation to govern its use. AI has the potential to significantly impact critical areas such as healthcare, employment, finance, and legal services. Without proper regulation, there is a risk of unintended consequences, including algorithmic biases that systematically disadvantage certain groups of people, privacy violations, and misuse of AI technologies. By establishing clear guidelines and standards, states can ensure that AI is developed and deployed responsibly, protecting individuals’ rights and fostering public trust in these transformative technologies.
Virginia, which was situated to become one of the first few states enacting laws specifically aimed toward high-risk AI systems, has long established itself as a leader in privacy and technology laws echoed across the country. Lawmakers attempted to continue this pioneering work with the introduction of two bills aimed at regulating AI in both the public and private sectors to provide clear guidelines for organizations using AI. Just recently, however, Virginia’s governor vetoed the bill pegged for private entities in the latest example of a growing animosity towards regulatory obstacles to technological advancements.
Virginia’s Proposed AI Legislation
The two bills – H.B. 2094 (for private entities) and S.B. 1214 (for public bodies) – focused on regulating the use of high-risk AI systems, defined as “any artificial intelligence system that is specifically intended to autonomously make, or be a substantial factor in making, a consequential decision.”
Both bills defined a “consequential decision” as “any decision that has a material legal, or similarly significant, effect on the provision or denial to any consumer of, or the cost or terms of” such things as educational opportunities, employment, financial and lending services, essential government systems, healthcare services, housing, insurance, or legal services. Additionally, Virginia’s bills defined “consumer” narrowly, excluding individuals acting in an employment or commercial context. This focused definition mirrored Virginia’s widely adopted privacy legislation and appeared to make the AI regulations more friendly to businesses.
The proposed legislation imposed regulatory requirements on developers, integrators, and deployers of high-risk AI systems and civil penalties for non-compliance. The addition of integrators into the bills, defined as either a public body or person that “knowingly integrates an artificial intelligence system into a software application and places such software application on the market,” contrasted AI legislation previously adopted by other states.
Such regulatory requirements included conducting AI impact assessments to analyze potential risks and benefits on individuals, groups, and society at large, implementing AI risk management programs to prevent algorithmic discrimination and ensure compliance with laws, and disclosing the reasoning behind AI-driven decisions.
The Veto
Virginia Governor Glenn Youngkin (R) wasn’t buying it. Youngkin vetoed H.B. 2094, dubbed the High-Risk Artificial Intelligence Developer and Deployer Act, on March 24, 2025, characterizing the bill as a “burdensome artificial intelligence regulatory framework” which “would harm the creation of new jobs, the attraction of new business investment, and the availability of innovative technology in the Commonwealth of Virginia.” Youngkin’s position echoed the concerns raised in a U.S. Chamber of Commerce letter urging that the bill be vetoed. According to the Chamber, “existing laws and regulations already cover many AI activities,” and enactment of the bill “could create duplicative, conflicting or burdensome regulations that would diminish the benefits of AI for consumers and the overall economy.”
S.B. 1214 remains pending in the Virginia House Appropriations Committee, but it is likely to receive the same fate if ever placed in front of Governor Youngkin for approval if it ever hits the Governor’s desk. But not all hope is lost for proponents of the bills, as H.B. 2094 may survive with a two-third vote in both houses of the Virginia General Assembly.
What This Means for Businesses
While the policies of the current administration on removing obstacles to technology and AI development have appeared to now trickle down to the state level, companies developing or using AI should continue to follow the evolving regulatory landscape that could impact company policies in the near term. As of September 2024, 31 states, Puerto Rico, and the Virgin Islands had adopted resolutions or enacted legislation involving AI. Therefore, companies should remain vigilant in enacting policies and action plans that comply with these laws and other existing laws that still apply to AI and its use in the public and private sectors.
For more information regarding what this means for your business, contact Nathan Studeny (NFS@kjk.com) or Michael Cantu (MRC@kjk.com).