Source: JD Supra

The Virginia legislature has passed a new law regulating high-risk artificial intelligence (AI) systems, making it one of the first U.S. states to enact comprehensive AI oversight. The law aims to address concerns about bias, accountability, and transparency in AI applications that significantly impact individuals' rights and opportunities.

One of the key provisions of the law is the classification of "high-risk AI systems," which includes AI used in hiring, credit assessments, healthcare, law enforcement, and other critical areas. Businesses deploying such systems must conduct bias audits and risk assessments to ensure fairness and compliance.

The legislation also requires companies to disclose when AI-driven decisions impact consumers, such as employment rejections or loan denials. Consumers must be given explanations and the right to challenge AI-driven decisions.

Privacy advocates praise the law for prioritizing transparency and fairness, but some industry leaders argue that overly strict regulations could slow innovation and place burdens on businesses. They warn that compliance costs might discourage AI adoption, especially for startups.

Virginia’s AI law reflects broader regulatory trends in the U.S., where states are taking the lead in AI governance while federal AI policies remain in development. The law could serve as a model for future AI legislation in other states and at the federal level.