Virginia's Misguided Attempt to Regulate AI

Chris Koopman on how the state can lead or get left behind

The following is a piece from Abundance Institute CEO Chris Koopman on Virginia’s latest AI bill. On March 24, 2025, Gov. Youngkin vetoed House Bill 2094. You can read the full text of his veto here and read more details from our team here.

There is a moment when good intentions meet bad policy, and the result is confusion, cost, and unintended consequences. That moment is now in Virginia, where the General Assembly has passed HB2094, a sweeping attempt to regulate artificial intelligence in the name of fairness and accountability. It now is with Governor Glenn Youngkin.

The bill’s backers say it will protect against algorithmic discrimination, ensuring that AI systems—used in everything from hiring decisions to loan approvals—don’t reinforce bias or harm consumers. But these are already covered by longstanding civil rights, consumer protection, and anti-discrimination laws. This doesn’t solve a problem so much as create one, layering new, vague compliance mandates on businesses that will do little to protect consumers but plenty to drive innovation out of the Commonwealth.

The bill reads like something drafted in a university seminar—idealistic, imprecise, and utterly detached from how businesses actually function. It demands that any company deploying AI perform costly, complex impact assessments and submit exhaustive documentation on how their systems work. It imposes penalties for failing to meet its ambiguous requirements, making AI development in Virginia a legal minefield.

And it won’t be cheap. Analysis from the Chamber of Progress estimates nearly $30 million in compliance costs for AI developers and businesses in Virginia, forcing many—especially startups and small enterprises—to hire teams of lawyers and consultants just to keep up. Large corporations, with their armies of compliance officers, will handle it just fine. Small businesses and innovators? They’ll struggle or leave.

There is a subtle, creeping danger in all this. America’s great advantage—its gift, really—has been that it does not regulate the future before it arrives. It allows new ideas to take shape, to be tested, to flourish or fail. This is what has made the U.S. the world’s leader in technology and innovation. But a regulatory fever is spreading. The European Union, in its rush to control AI, has already passed heavy-handed laws that risk driving investment elsewhere. China, meanwhile, is pursuing AI with focus and force, seeing it as a tool for global dominance. And now Virginia, of all places, wants to slow itself down?

We are at the dawn of an AI revolution. The laws we pass today will shape whether America leads or lags behind. Do we want to be the country that pioneers AI-driven breakthroughs in medicine, business, and education? Or do we want to be the country where innovators must first seek permission from bureaucrats before they can build? Virginia already has strong civil rights and consumer protection laws that apply to AI. If policymakers want to encourage responsible AI development, they should work with businesses and researchers to establish best practices, not impose vague, one-size-fits-all mandates that will kill innovation before it starts.

Virginia would be wise not to punish innovation in the name of speculative fears. It will lead, not regulate itself into irrelevance. The world is moving fast. Virginia must decide whether it wants to move with it—or get left behind.