Virginia First To Pass AI Legislation in 2025—Awaits Governor Approval
Joe Cahill
Virginia has become the first state in 2025 to pass comprehensive artificial intelligence regulation, with lawmakers approving the "High-Risk Artificial Intelligence Developer and Deployer Act" (HB 2094). The legislation, which passed by narrow margins in both chambers, establishes regulatory frameworks for AI systems making consequential decisions in education, employment, financial services, health care, and legal services. Governor Glenn Youngkin has until March 24 to sign, veto, or return the bill with amendments, and if approved, the law would take effect July 1, 2026.

The legislation requires developers to disclose risks, limitations, and intended purposes of high-risk AI systems, along with performance evaluation summaries and measures to mitigate algorithmic discrimination. Deployers must exercise a "reasonable duty of care" and implement risk management policies, with violations potentially carrying civil penalties between $1,000 and $10,000 under the enforcement authority of the Virginia Attorney General. Notably, compliance with established standards like NIST's AI risk management frameworks or ISO/IEC 42001 is deemed sufficient to meet the bill's requirements.

Three AI Trends to Watch For in 2025
Coleman Strine
Deeper Thinking
In 2025, the current transition toward advanced reasoning models will likely accelerate. For example, many AI companies are currently developing and releasing chain-of-thought models, which break down tasks into logical steps and analyze each step sequentially, and are less prone to hallucinations and other mistakes. This is a relatively new approach, which results in more structured and detailed output, compared to non-chain-of-thought models, but requires more computational resources during inference. Several of the latest and most advanced models include chain-of-thought reasoning, such as OpenAI's o1, Anthropic's Claude 3.7 Sonnet, and DeepSeek's R1 models. Additionally, OpenAI recently announced that it will focus on chain-of-thought models in the near-term, and that its most recent release, GPT-4.5, will be its last non-chain-of-thought model.
AI Agents
AI agents, which are capable of autonomously performing tasks on behalf of a user, will comprise the next major shift in consumer-facing AI technology. For example, OpenAI's Operator and Google's Mariner can take control of a cloud-based internet browser and interact with websites without an API to accomplish tasks that could previously only be performed by a human. Additionally, OpenAI's Deep Research utilizes OpenAI's upcoming o3 model to iteratively browse and ingest many websites over tens of minutes to perform highly detailed, multi-step research on specific topics.
Unified Models
The increasing complexity of the AI landscape has already led to some frustration among consumers, who must choose between many different model options for each query. Currently, third-party tools exist, which interpret a user's input and route queries to the most appropriate AI system. However, in the coming year, we expect to see AI providers unify their models to simplify the user experience. For example, OpenAI recently announced plans to create a large-scale model capable of adapting its performance and approach, depending on the user's input, thereby eliminating the need for the user to pre-select an individual model for use. This approach, if successful, will streamline the user experience and allow for more efficient inference processing, likely resulting in both lower costs and an increased uptake among consumers.
 
Quick Links
For additional insights on AI, check out Baker Botts’ thought leadership in this area:

1. AI Counsel Code Podcast: In the latest episode, "Understanding AI Legal Structures within a Tech Giant," Mark Speegle hosts a discussion with Jesse Adland, Director in the Law Department at AMD. They explore AI legal challenges, the role of AMD's AI group, industry trends, and the dynamic nature of AI's legal landscape. Jesse shares insights on managing AI projects, intellectual property concerns, and the rapidly evolving regulatory framework.

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