CM Law Partner Reiko Feaver is featured in Informa TechTarget’s AI Business, which highlights a growing shift in how AI is regulated in the United States: not through Congress but through government procurement.
Instead of passing sweeping federal legislation, both the White House and states like California are using purchasing power to shape how AI systems are built, deployed, and governed. The result is an emerging patchwork of rules that could significantly raise compliance costs for AI vendors while creating conflicting obligations across jurisdictions.
At the federal level, the General Services Administration (GSA) has introduced AI procurement rules emphasizing what it calls a “no dogmas” approach. The rules require AI systems used in government contracting to remain neutral and avoid ideological positioning, including considerations tied to diversity, equity, and inclusion.
California, however, is moving in a sharply different direction. Under Governor Gavin Newsom’s executive order, vendors must demonstrate safeguards against harmful bias and ensure civil rights protections. The contrast sets up a direct policy tension between federal and state procurement standards.
Reiko emphasized the legal limits of federal authority in this space, noting: “The federal government cannot tell a state how they’re going to spend their money.” She further explained that non-discrimination requirements “can’t be preempted by the federal government, even if they were to try,” underscoring the durability of state-level procurement rules.
The federal government has also sought to limit state AI regulation through executive action, but states continue advancing their own frameworks. This creates a fragmented regulatory environment where AI vendors may face different—and sometimes conflicting—requirements depending on where they seek contracts.
Experts cited in the report warn that procurement-based regulation effectively shifts governance from legislatures to purchasing departments. As one industry voice noted, “money drives behavior,” meaning vendors must adapt or risk losing access to lucrative government contracts.
For AI companies, the implications are significant. Rather than building a single compliant system, firms may need to design flexible governance frameworks that can satisfy multiple regulatory philosophies—ranging from neutrality-focused federal standards to California’s civil-rights-centered approach.
Read the full article HERE
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