As artificial intelligence continues transforming industries and daily life, the need for clear governance and regulation becomes more pressing. While federal legislation on AI is still in its early stages, state lawmakers have taken the lead by introducing a wave of legislation to address the risks and opportunities posed by AI. In 2024, nearly 700 AI-related bills were introduced across 45 states, marking a significant step in the evolving landscape of AI regulation. These efforts reflect the lessons learned from previous waves of state-level data privacy laws and offer a preview of the regulatory frameworks that could shape AI’s future. 

The Surge of State-Level AI Legislation 

In 2024, state legislatures began responding to the rapid growth of AI with a variety of bills aimed at addressing issues such as AI-powered discrimination, data privacy, and transparency. Some states, like Colorado, have already enacted laws to curb discriminatory practices fueled by AI, positioning themselves as frontrunners in AI regulation. In addition, several states have formed task forces to study AI’s impact and make recommendations for future legislation. 

Key trends in state-level AI legislation include: 

• Anti-Discrimination Measures: Colorado’s bill to mitigate AI-based discrimination is a landmark piece of legislation that targets biases in AI algorithms, ensuring they do not unfairly affect marginalized groups.
• Transparency and Accountability: Many states are focusing on creating transparent AI systems, requiring developers to disclose the purpose and function of their AI tools.
• Data Privacy: States are beginning to integrate AI into existing privacy frameworks, drawing parallels with the consumer privacy laws passed in recent years.
• AI in Political Campaigns and Deepfakes: Some states are tackling the ethical concerns surrounding AI-generated media, including deepfakes, by implementing regulations for their use in political campaigns. 

State Law Overview: Leading the Charge on AI Governance 

State legislators are taking proactive steps toward creating AI governance frameworks, with several key laws enacted or being considered in 2024. Among the states leading the charge are Utah and Colorado, each introducing unique measures to regulate AI in their jurisdictions. 

Key areas of focus in state-level AI legislation include: 

AI in Employment: 

• Colorado: Colorado has introduced the AI Hiring Accountability Act, aimed at preventing discriminatory practices in hiring decisions made by AI systems. This law requires employers to conduct audits of the AI tools they use for hiring, ensuring that these systems do not unfairly disadvantage candidates based on race, gender, or other protected characteristics. This proactive measure places Colorado at the forefront of efforts to regulate AI’s role in employment practices and ensure fairness in the hiring process.
• California: California has also been active in addressing AI in employment. Under the California Consumer Privacy Act (CCPA) and its extension, the California Privacy Rights Act (CPRA), the state has placed an emphasis on ensuring transparency in AI systems used for hiring. Employers are required to disclose their use of AI in employment decisions and provide candidates with the ability to opt-out of AI assessments, making it a strong supporter of consumer rights in the hiring process. 

AI Transparency and Disclosure: 

• Utah: Utah has enacted a law requiring greater transparency in the use of AI, particularly in high-stakes areas such as hiring, credit scoring, and healthcare. The law mandates that companies disclose to consumers when they are interacting with an AI system and provides individuals with the right to opt out of AI-based decisions, giving consumers more control over how AI affects their lives. This law is one of the first to focus on empowering consumers through transparency and consent, setting a new standard for accountability in AI deployment.
• California: California’s approach to AI transparency is highlighted by the California Artificial Intelligence Transparency Act, introduced in 2024. This bill requires companies to disclose to consumers when AI is being used to make decisions that affect them. It further mandates that individuals have the right to access and review the algorithms used to make those decisions, providing additional transparency around the operation of AI systems. These disclosures must also cover the risks associated with the use of AI and outline the company’s plan to address them. 

Data Privacy and Security: 

• Utah: As part of Utah’s broader approach to AI regulation, the state has also integrated provisions that align AI governance with existing data privacy regulations. Specifically, the law requires that AI systems comply with stringent data protection standards, ensuring that sensitive data used in training models is adequately protected and that individuals have control over their data. This move mirrors the trend seen in states like Virginia, where AI-related laws are being integrated into comprehensive data privacy frameworks.
• California: California has long been a leader in data privacy legislation, and its approach to AI follows this tradition. The California Privacy Rights Act (CPRA) specifically addresses the intersection of AI and data privacy by requiring companies to protect consumers’ personal information when used in AI systems. The law provides individuals with the right to request details about how their data is being used, including by AI systems. California is also considering additional AI-specific regulations to complement existing privacy laws, ensuring AI systems are designed with privacy and security in mind. 

Consumer Protection and AI-Generated Content: 

• Colorado and Utah: Both states are taking steps to address the ethical issues surrounding AI-generated content. Colorado has passed legislation requiring companies to disclose when AI is used to create digital content, particularly in areas such as advertising and media. Meanwhile, Utah’s laws include provisions regulating the use of AI in political campaigns, ensuring that AI-generated content, such as deepfakes, is clearly labeled and subject to scrutiny.
• California: California is also tackling the challenges posed by AI-generated content. The state introduced a new set of regulations aimed at preventing the spread of misinformation through AI-generated content, such as deepfakes and synthetic media. The law requires creators of such content to include clear disclaimers, and if the content is used for political or commercial purposes, it must be explicitly labeled as AI-generated. California’s broad focus on consumer protection in this area ensures that the public can easily distinguish between human- and AI-generated media, maintaining trust in digital content. 

Why States Are Leading the Charge on AI Regulation 

The absence of a federal framework for AI regulation has given states the freedom to experiment with different approaches to governance. This decentralized approach mirrors the wave of consumer data privacy laws passed by states in the last decade. While no single model has emerged, states are drawing from successful privacy laws to guide their AI legislation. Colorado’s broad anti-discrimination bill, for example, is often cited as an early success that could inspire other states to follow suit. 

Furthermore, the creation of AI task forces or councils in 33 states underscores the urgency of the issue. These groups are tasked with understanding the potential risks of AI and providing recommendations to their respective legislatures. 

Looking Ahead: What Does the Future Hold for AI Regulation? 

As the regulatory landscape for AI continues to evolve, experts predict that 2025 will see even more state-level action, with comprehensive AI laws gaining momentum. This reflects the pattern seen with privacy laws, where early state efforts paved the way for more widespread regulation. The challenge, however, lies in balancing innovation with safety, ensuring that AI’s potential is harnessed responsibly while mitigating risks. 

Several key factors will shape the trajectory of state AI regulation in the coming years: 

• Collaboration Between States: As more states introduce AI regulations, the potential for a fragmented legal landscape increases. States may need to collaborate to create a unified approach to avoid confusion and conflicting regulations. 
• Federal Intervention: While states are currently taking the lead, federal lawmakers may eventually step in to provide overarching guidelines or a national framework for AI regulation. 
• Industry Input: AI developers and tech companies will play a crucial role in shaping AI legislation by providing expertise on the feasibility of proposed regulations and ensuring that new laws are practical and enforceable. 

As states continue to lead the charge on AI regulation, the future of AI governance will likely see more cohesive and comprehensive frameworks emerging. By drawing lessons from the successful implementation of data privacy laws, states are positioning themselves to create robust and effective AI governance models that could serve as blueprints for the federal government. As 2025 approaches, all eyes will be on how these regulations evolve and their impact on AI innovation and deployment.