Artificial intelligence is now embedded in many parts of business operations, from hiring and performance evaluation to customer service and compliance monitoring. As AI use expands, regulators are beginning to move from observation to action.

A recent example is New York’s Responsible AI Safety and Education (RAISE) Act, signed into law in late 2025. While the law is aimed primarily at developers of advanced AI systems, it sends a broader message to businesses across industries: AI governance is becoming a legal and compliance issue, not just a technology decision.

For corporate leaders, HR teams, and legal departments, this development is an important signal of where regulation is headed.

What the RAISE Act Tells Us About Regulatory Direction

The RAISE Act focuses on advanced, high-capability AI systems and introduces expectations around safety, documentation, and accountability. Rather than banning AI use, the law emphasizes responsible deployment and oversight.

Although many companies may not fall directly within the scope of the Act today, its framework reflects growing regulatory concerns about how AI systems are trained, monitored, and used in real-world decision-making. Other states are watching closely, and similar approaches may emerge elsewhere.

For businesses, the key takeaway is not the technical details of this one statute, but the broader trend toward formal AI governance requirements.

Why This Matters for Corporate Clients

Many organizations already rely on AI tools in day-to-day operations. These tools may be used to screen job applicants, evaluate employee performance, automate customer interactions, or support internal decision-making.

As laws like the RAISE Act emerge, companies should consider whether they understand how these systems operate and what risks they may create. Even when AI is provided by third-party vendors, businesses remain responsible for how the technology is used within their operations.

This is particularly relevant for companies operating across multiple states, where differing AI-related rules may begin to apply depending on location, industry, or use case.

AI Governance and Employment Risk

One area drawing increased attention is the use of AI in employment-related decisions. Regulators and courts are closely examining whether automated tools may unintentionally create biased or discriminatory outcomes.

The RAISE Act’s emphasis on safety and documentation reflects broader concerns about transparency and accountability. Employers may soon face higher expectations to explain how AI systems influence hiring, promotion, or evaluation decisions and to demonstrate that safeguards are in place.

For HR and legal teams, this reinforces the importance of understanding not only what AI tools are used, but how they are implemented and reviewed.

Preparing Without Overreacting

Businesses do not need to pause AI adoption, but they do need to be thoughtful. As regulation develops, companies benefit from knowing where AI is used internally, how decisions are made, and who is responsible for oversight.

Early review helps organizations adapt gradually rather than respond under pressure later. It also supports better coordination between legal, HR, compliance, and IT teams as expectations evolve.

Looking Ahead

The RAISE Act is one of the clearest signals yet that AI regulation is moving forward at the state level. Even in the absence of comprehensive federal legislation, businesses should expect more guidance, oversight, and enforcement related to AI governance.

Companies that approach AI as a business and legal issue, not just a technical one, will be better positioned to manage risk while continuing to innovate.

As AI regulation continues to evolve, understanding how new laws and regulatory trends may affect your operations is increasingly important.