A BIG, BEAUTIFUL DELETION – “YES” TO TEXAS REGULATION OF AI!

By Jonathan K. Hustis, Member, Fulton Jeang, PLLC, Dallas, Texas USA

Yay! With the Big Beautiful Bill that passed last week, Congress killed a proposed federal halt to state regulation of artificial intelligence. That decision, by itself, is great news.

Why? Well, Texas may now proceed to develop an effective enforcement regime around its Texas Responsible AI Governance Act (TRAIGA), passed earlier this year. TRAIGA enables the Lone Star State to continue leading the country, specifically in protecting commerce and citizens from the dangers of AI’s rapidly increasing power and proliferation. It also means that we can lead by allowing the responsible rapid development of its benefits.

A good foundation for Texas. The evolution from its first introduction in the Texas House last fall to its final passage this spring indicates that Texas can lead responsibly and intelligently, and move quickly. The first bill introduced was overly broad, a bad implementation of a good idea. Then, as Representative Cipriglione shepherded the bill through the House, it evolved to something much different and much better. We dropped the EU approach and moved to something  less heavy-handed, more nimble. The resulting law is reasonably focused on preventing potential harms that have been identified.

A challenge. It remains to be seen if we can take this framework and actively regulate, but in a similarly smart, focused way. AI is not for dummies. We all, including our regulators, have to smarten up continuously and move nimbly if we want to develop AI’s business benefits responsibly.

How can Texas lead? First step was to pass the bill. Now there remain  dangers to privacy, individual mental health, free expression of ideas, our rights to equal opportunity free of political discrimination, from real dangers posed by the inevitable ultra-rapid proliferation of AI. I think there are also dangers in simply following the wishes of experts in the private sector, especially those experts being bought up by huge corporate leaders. Too much power moving in the interests of too few owners. The software sector biggies sometimes squash small competitors. Small and midsize businesses, and local colleges and universities, can do some amazing innovation together. They can enable local growth in cutting edge research, and following local tech employment, if SMBs are not pushed out of the marketplace by corporate giants. But I am a corporate and technology law practitioner, not a smart, educated, responsible regulator. We need the latter here. This will be hard but delicate work for knowledgeable public servants.

How else to lead? Can Texas and other states see a need and benefit, where they  communicate, collaborate, and cooperate in their regulatory approaches? Could this result in the development of a beneficial interstate network (or even patchwork) of knowledge, commerce and reasonable  regulations? Something that encourages each state to protect its citizens while fostering local businesses becoming part of this global marketplace of ideas and commerce?

This is already far beyond a field of dreams. Let’s learn fast and build well.

Jonathan K. Hustis, the author, is member of Fulton Jeang PLLC. He is an accomplished general counsel whose experienced legal practice includes most things related to growing technology companies: corporate governance, M&A, compliance, financing, contracts, and privacy law. He is admitted to practice in Texas and federal courts in the Northern District of Texas. Jon is also a Certified Information Privacy Professional/US.