AI, DATA, AND ANALYTICS
dispute emerge in May when a union claimed that a gaming company’s use of an AI-voiced Darth Vader character unlawfully replaced a human voice actor, and yet another claim in August that an AI-powered hiring tool led to hiring discrimination. Privacy-Related Litigation Emerged as a Business Threat 2025 also saw two new litigation threats emerge. Any business using AI to monitor or record customer service calls needs to track the California lawsuit filed in June alleging a violation of state wiretapping laws. And an August lawsuit against a tech company underscores the legal and compliance risks companies face when using AI notetakers.
2025 PREDICTIONS RECAP
Just as we predicted, the Trump administration revoked Biden’s regulatory-focused AI Executive Order in January and instead went all-in on innovation. July’s “AI Action Plan” identifies a slate of policy goals that aim to achieve “global AI dominance” in infrastructure, international diplomacy, and security. Feds Loosened the Reins on AI Regulation We correctly predicted that Congress wouldn’t pass any substantive AI regulation. In fact, the exact opposite almost happened. Federal lawmakers pursued but then dropped a law in July that would have cleared the decks and blocked or dissuaded states from regulating AI. Congress Didn’t Regulate AI Last year we wondered whether AI would become your life coach and therapist – and we couldn’t have been more right. Harvard Business Review revealed that the top use of GenAI in 2025 was “therapy and companionship,” overtaking idea generation, organization, and learning. AI Became Your New Best Friend
PREDICTIONS FOR 2026
Colorado and Virginia Will Take Different Regulatory Paths
Colorado’s landmark AI law will not take effect in 2026, as legislators, regulators, and stakeholders delay things to renegotiate. But Virginia will take another crack at AI lawmaking, this time aiming to regulate healthcare transparency and exposure. California’s ADMT Regulations Will Make AI Governance a National Standard Gearing up for CPPA regulations to take effect in 2027, businesses will need to grapple with risk assessments, cybersecurity audits, pre-use notices, opt-out rights, and annual cybersecurity audits in 2026. And most multistate businesses will choose to comply with this stringent standard by adopting an AI governance program as table stakes. Bias Audits Will Become a Must-Have for Employers Even without a federal AI law, plaintiffs’ attorneys are already using the absence of an audit as evidence of negligence or discriminatory design. Learn more about FP’s AI Bias Detection and Mitigation Program here. Congress Will Still Be Talking About AI, Not Passing a Comprehensive Law Despite urging from the White House, Congress will not pass a comprehensive federal AI statute in 2026. Instead, employers will face a growing patchwork of state and local laws – and growing expectations that they need to align with recognized frameworks (like NIST’s AI risk management principles).
Usama Kahf, CIPP/US Irvine Partner, Co-Chair
OUR PREDICTIONS WERE CORRECT
HOW DID WE DO?
David J. Walton, AIGP, CIPP/US Philadelphia Partner, Co-Chair
MORE FROM 2025 States Acted, With Mixed Results
You can read all about the slate of regulations and new AI-related laws that California passed (and didn’t) pass in our California section . But we also saw action in Texas and Virginia in 2026, where an AI law passed the legislature but was vetoed by the governor in March (more on what we expect below). Workplace Disputes Heated Up
Erica Given Pittsburgh Partner, Vice Chair
The massive AI litigation we’ve been tracking since 2024 took a turn in May when a judge allowed a job applicant’s lawsuit against Workday to move forward as a nationwide class action, ruling that the company’s AI-powered hiring tools may have had a discriminatory impact on older applicants. But we also saw a labor
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