AI & Startup Law

Which U.S. states and which other jurisdictions have AI laws that affect my startup?

U.S. AI regulation is a shifting patchwork. Colorado repealed its 2024 AI Act and reenacted it as the Automated Decision-Making Technology framework (SB 26-189, signed May 14, 2026, with developer and deployer obligations beginning January 1, 2027); Texas's intent-based TRAIGA (HB 149) took effect January 1, 2026; and California's transparency laws (SB 53 and AB 2013) are live. The EU AI Act applies extraterritorially, with obligations phasing in on dates set in the Regulation. Lysinski & Associates P.C. maps these triggers to how a system is actually built.

Is there one federal AI law I can just follow?

No — U.S. AI regulation is a shifting state patchwork rather than a single comprehensive federal statute.

You map your system to multiple triggers rather than to a single statute.

Which state AI laws are live right now?

Texas's intent-based TRAIGA (HB 149) took effect January 1, 2026; California's transparency laws (SB 53 and AB 2013) are live; Colorado repealed and reenacted its AI Act as the Automated Decision-Making Technology framework (SB 26-189, signed May 14, 2026, obligations beginning January 1, 2027); Utah's Artificial Intelligence Policy Act (SB 149, 2024, amended 2025) requires disclosure when consumers interact with generative AI; and in Illinois, HB 3773 (AI in employment) is in effect as of January 1, 2026. This is not an exhaustive list and should not be relied on as one.

An Illinois note: HB 3773's prohibition and notice duty are in effect, but the implementing rules remain in flux — verify the current rulemaking status before relying on operational specifics.

Do I have to comply with the EU AI Act if I am in the U.S.?

It can apply extraterritorially. Under the Regulation, prohibitions applied from 2 February 2025, general-purpose AI obligations from 2 August 2025, general application and Article 50 transparency from 2 August 2026, and certain high-risk AI systems that are safety components of products under EU harmonisation law (Article 6(1) / Annex I) from 2 August 2027.

These dates are set in the Regulation; confirm any later amendments before relying on a specific date.

Can the federal government preempt these state laws?

This is unsettled. A December 2025 executive order (EO 14365) directs federal action — including an AI Litigation Task Force — aimed at challenging state AI laws, but an executive order cannot by itself preempt state law, and these state statutes remain enforceable unless and until a court says otherwise.

Plan to the enforceable state laws while watching the litigation.

What Illinois-specific exposure should a startup watch?

Beyond HB 3773, Illinois BIPA carries real damages exposure — liquidated damages of $1,000 (negligent) and $5,000 (intentional or reckless) per violation under 740 ILCS 14/20 — and the single-recovery amendment (SB 2979 / Public Act 103-0769) limits recovery to one per method of collection, whose retroactive reach has been litigated (Clay v. Union Pacific, 7th Cir., decided April 1, 2026). For health-tech, the Wellness and Oversight for Psychological Resources Act (HB 1806) restricts AI from providing therapy services.

If your system touches biometric data, BIPA attaches regardless of the AI-specific statutes. See the regulated-industry and internal-policy pages.

Talk to an attorney who builds AI

Do not let aggressive state enforcement turn a national rollout into a compliance problem. Get a jurisdiction map tied to your system's real data flows and decision points. (773) 777-9888.

For the firm’s related legal service, see AI governance frameworks.

(773) 777-9888 · info@lysinski.com ·

Frequently asked questions

Which U.S. states have AI laws affecting startups?

Verified active examples include Texas (TRAIGA / HB 149, effective January 1, 2026), California (SB 53 and AB 2013, live, plus the AI Transparency Act SB 942 / AB 853), Colorado (SB 26-189, the Automated Decision-Making Technology framework, signed May 14, 2026, obligations beginning January 1, 2027), Utah (Artificial Intelligence Policy Act / SB 149, 2024, amended 2025), and Illinois (HB 3773, in effect, plus BIPA). This landscape changes fast — verify the current list for your situation.

Do I need to follow the EU AI Act in the U.S.?

Possibly — it applies extraterritorially to systems placed on the EU market or affecting EU users. Under the Regulation, general application and the Article 50 transparency obligation began 2 August 2026, with certain product-embedded high-risk obligations from 2 August 2027. Confirm any amendments before relying on a date.

Is the Colorado AI Act still in effect?

Colorado's 2024 AI Act (SB 24-205) was repealed and reenacted as the Automated Decision-Making Technology framework (SB 26-189), signed May 14, 2026, with developer and deployer obligations beginning January 1, 2027. Verify the current status, because this area has changed repeatedly.

What is Texas TRAIGA?

The Texas Responsible Artificial Intelligence Governance Act (HB 149), an intent-based AI statute effective January 1, 2026. Verify the current enforcement details before relying on them.

What is the status of Illinois HB 3773?

HB 3773 (Public Act 103-0804) bars AI-driven discrimination in employment and requires notice, and it is in effect as of January 1, 2026. Its implementing rules remain in flux — verify the current rulemaking posture before relying on operational specifics.

Can a federal executive order override state AI laws?

Not by itself. An executive order (EO 14365) and a federal AI Litigation Task Force have moved against state AI laws, but an executive order cannot itself preempt state law, and the state statutes remain enforceable pending litigation. This is unsettled — watch the court cases.

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