Governor Greg Abbott signed the Texas Responsible Artificial Intelligence Governance Act (TRAIGA), into law June 22, 2025. The law aims to address the misuse of artificial intelligence (AI) systems and protect citizens from potential harms. Business owners in the area are wise to gain an understanding of the key provisions to help better ensure your operations are in compliance.
What should business owners know about this new law?
TRAIGA will come into effect on January 1, 2026, and introduces several important provisions that business owners must be aware of, including:
- Disclosure requirements: State agencies must disclose when citizens interact with AI tools.
- Biometric data: Capturing biometric identifiers without consent is prohibited.
- AI system restrictions: Developers cannot create systems that manipulate behavior, make discriminatory decisions, or produce exploitative deepfakes.
The government will implement a higher level of scrutiny of public sector’s use under this law compared to the private sector. However, the law does require those who operate in the private sector prevent knowingly using AI systems that could cause harm to consumers.
What happens if my business is not in compliance with this new law when it goes into effect?
TRAIGA imposes strict penalties for violations, with fines reaching up to $100,000 per incident. If an organization does not rectify a violation within a 60-day cure period, the attorney general may impose fines ranging from $80,000 to $200,000 per violation. The law’s per-violation penalty structure could lead to substantial financial consequences for businesses that fail to comply.
To establish a violation under TRAIGA, the government must demonstrate that an entity intentionally disregarded the law’s requirements while developing or deploying an AI model. This “intent element” is crucial in determining culpability and ensuring that businesses acting in good faith are not unduly penalized.
Bonus: Compliance checklist for business owners
To help better ensure compliance with TRAIGA, business owners should consider the following steps:
- Review AI systems: Evaluate current AI systems for compliance with TRAIGA’s provisions.
- Implement disclosure practices: Establish clear disclosure protocols for AI interactions.
- Consent mechanisms: Develop systems to obtain consent for biometric data collection.
- Ethical AI development: Ensure AI systems do not manipulate behavior or make discriminatory decisions.
TRAIGA represents a proactive approach to AI governance in Texas, aiming to prevent misuse and protect consumer rights. Business owners must familiarize themselves with the law’s provisions and take necessary steps to help better ensure compliance. By doing so, they can contribute to a responsible AI ecosystem while safeguarding their operations from legal repercussions. As AI technology continues to evolve, staying informed and adaptable will be key to navigating future regulatory landscapes.