AI Regulation and What Every Tech Company Should Know

Navigating the fragmented AI regulatory landscape requires shifting from a search for singular, bright-line rules to a risk-based governance model. Rather than a monolithic federal law, the current environment consists of overlapping circles of privacy, cybersecurity, and sector-specific legislation, particularly in the United States where state-level mandates create a complex patchwork. Shannon Yavorsky, a data lawyer at OREC, emphasizes that organizations must prioritize transparency and accountability by maintaining strict inventories of AI tools to combat "shadow AI" and conducting rigorous due diligence during procurement. High-stakes systems, such as those used for loan or healthcare decisions, demand greater scrutiny than low-stakes operational tools. Establishing clear internal policies and documenting decision-making processes are essential steps for managing liability and ensuring compliance as global standards like the EU AI Act continue to evolve.