(The Center Square) – Gov. Glenn Youngkin has taken action on two tech-related bills passed by Virginia lawmakers, vetoing a high-profile proposal to regulate artificial intelligence and returning a data center bill with technical changes and a delayed timeline.
The artificial intelligence bill, House Bill 2094, would have required developers and users of high-risk systems to complete impact assessments, submit public transparency reports, and adopt safeguards against algorithmic discrimination.
In his veto message, Youngkin said the bill went too far and could hurt innovation. He described the measure as a “burdensome” regulatory framework that could discourage companies from investing in Virginia.
He continued, “The role of government in safeguarding AI practices should be one that enables and empowers innovators to create and grow, not one that stifles progress and places onerous burdens on our commonwealth’s many business owners. This bill would harm the creation of new jobs, the attraction of new business investment, and the availability of innovative technology in the Commonwealth of Virginia.”
NetChoice and the Chamber of Progress opposed the bill, arguing it would drive up compliance costs and create legal uncertainty.
“We support the goal of ensuring ethical and responsible uses of Artificial Intelligence (“AI”), however, we are concerned the proper analysis has not been undertaken to determine how this legislation’s liability and impact assessment requirements will impact small businesses or whether the proposal conflicts with current Virginia State law,” stated The U.S. Chamber of Commerce.
Supporters of the legislation said it was an important first step in setting basic standards for AI systems used in sensitive decision-making.
Youngkin also returned House Bill 1601 with amendments. The bill addressed oversight of high-energy-use data centers that require large amounts of electricity and have raised concerns about their impact on Virginia’s power grid.
Data centers manage, process, and share large amounts of data.
The original version required localities to conduct site assessments before approving data center developments.
The governor’s changes include replacing the word “shall” with “may,” giving local governments the option, not the obligation, to conduct those assessments. He also added a reenactment clause, meaning the bill would not take effect unless the General Assembly passes it again in 2026.
While the changes are only technical, they soften the bill’s requirements and delay its implementation.
A recent report by the Joint Legislative Audit and Review Commission found that data center growth could increase electricity bills by as much as $444 per year.
A JLARC report shows that without regular updates to cost-sharing rules, data centers could account for over 70% of energy-based cost allocation by 2050, potentially shifting costs onto other customers.
The General Assembly can vote to accept or reject the governor’s amendments. Overriding the artificial intelligence bill veto would require a two-thirds vote in each chamber.
