Texas lawmakers are about to strangle the AI revolution in the Lone Star State with red tape imported straight from Europe’s playbook.
At a Glance
- Texas has attracted major tech companies like Tesla, Meta, and Nvidia due to its previously innovation-friendly environment
- House Bill 149, modeled after Europe’s restrictive AI Act, threatens to undermine this progress with excessive compliance requirements
- The bill has been revised but still includes a new state AI council with a $25 million price tag and 20 new bureaucrats
- Other states like Virginia and California have vetoed similar heavy-handed AI regulations
- Texas has an opportunity to lead with focused, limited regulations that protect consumers without stifling innovation
The Lone Star State’s AI Opportunity – And Risk
Texas has positioned itself as the next frontier for technological innovation, particularly in artificial intelligence. Major corporations including Tesla, Meta, and Nvidia have flocked to the state, drawn by its business-friendly climate, abundant land, and talented workforce. The state seemed poised to lead the AI revolution – that is, until lawmakers decided to import Europe’s innovation-killing regulatory framework through House Bill 149, also known as the Texas Responsible AI Governance Act (TRAIGA).
“Excessive regulation of the AI sector could kill a transformative industry just as it’s taking off.” – Vice President J.D. Vance.
The original version of H.B. 149 was a bureaucrat’s dream and an entrepreneur’s nightmare. It proposed open-ended audits, vague risk classifications, and compliance mandates that would have crushed startups under paperwork and regulatory uncertainty. The bill borrowed heavily from Europe’s AI Act and the Biden administration’s AI Bill of Rights – neither of which has shown any evidence of fostering innovation. In fact, quite the opposite.
Slight Improvements, Lingering Problems
To their credit, Texas lawmakers recognized some of the most glaring issues with the original bill and made revisions. They removed the open-ended audit requirements and narrowed some of the overly broad definitions. But before we break out the champagne, let’s be clear: the revised bill that passed the House and now sits in the Senate still creates a brand new state AI council and imposes significant reporting requirements on AI developers.
The financial impact? Over $25 million and 20 new full-time state employees. So much for Texas’s small-government ethos! This bureaucratic expansion contradicts everything the state supposedly stands for and creates a foundation for future regulatory overreach. Once you create a bureaucracy, it never voluntarily shrinks – it only grows larger and demands more power year after year.
Learning From Other States’ Mistakes
Texas would be wise to look at what’s happening elsewhere before charging ahead with this regulatory scheme. Both Virginia and California – yes, even California – have vetoed similar heavy-handed AI bills after recognizing their potential negative impact on job creation and business investment. When California shows more restraint than Texas on regulation, you know something has gone seriously wrong in Austin.
Colorado’s experiment with restrictive AI legislation has already raised serious concerns about job losses and regulatory confusion, prompting the creation of yet another government entity – an AI task force. It’s a cautionary tale of how good intentions can lead to economic damage and more bureaucracy. Is this really the path Texas wants to follow?
A Better Path Forward
If Texas truly wants to lead the AI revolution while protecting consumers, there are simpler, more effective approaches. For starters, the AI Council should have a sunset provision – let’s say 2030 – to prevent it from becoming a permanent burden. The budget should be capped, and small businesses should be exempted entirely. Most importantly, enforcement should focus on actual consumer harm rather than preemptive regulation of hypothetical risks.
The federal approach under President Trump has wisely shifted toward reducing barriers to innovation in AI rather than creating new ones. Texas has always prided itself on being a beacon of economic freedom and limited government. This is the moment for the state to live up to that reputation by creating an AI regulatory framework that is focused, limited, and innovation-friendly.
Instead of importing Europe’s failed regulatory model, Texas should create its own American approach that balances consumer protection with entrepreneurial freedom. The Lone Star State can either lead the AI revolution or strangle it with red tape. The choice should be obvious, but somehow, it isn’t to those holding the regulatory pen in Austin.
