Jul 31, 2025

Texas is opening its doors to AI innovators as California's restrictive tech regulations rise. Ken Herman While California's tech scene is legendary, the state's lawmakers are botching artificial intelligence policy with a tangle of red tape. Texas has quickly become a new hub for technology giants and is throwing open its doors to innovators ready to escape the regulatory chaos of the Golden State. AI is transforming industries from energy to healthcare to agriculture at a pace that leaves lawmakers scrambling. As the voice of Texas business, I see AI's potential to redefine the future, and I know from my conversations with business leaders here and across the country that smart policy is key to unlocking it. So far, California lawmakers have churned out over 30 AI-related bills this year, each more muddled than the last. Senate Bills 243 and 420, for example, target a range of issues, from mental health chatbots to general-purpose AI. Layer in proposed bans on impersonation tools, new limits on how employers can use AI and rigid rules around biometric data, and the result is a regulatory morass that threatens to halt innovation in its tracks. From scrappy startups to major players in the technology sector, firms of all sizes are getting buried under a mountain of conflicting requirements, forcing them to divert time, money and energy toward compliance instead of building the next big thing. Texas, meanwhile, is clearing a path for AI trailblazers. This summer, Texas Gov. Greg Abbott signed House Bill 149 , the Responsible AI Governance Act. The business community worked closely with lawmakers to refine this piece of legislation, which will serve as a gold standard for state-level AI regulation that protects freedoms and fuels progress. HB 149 bans harmful AI, safeguards biometric data and ensures government transparency. A 36-month regulatory sandbox allows companies to test innovative AI ideas with minimal bureaucratic hurdles, while a state advisory council ensures policymakers remain grounded in real-world expertise. Texas doesn't stifle innovators with top-down government edicts, we work with them. This means entrepreneurs, engineers and job creators find a partner — rather than an adversary — when seeking to expand their operations here. California's overregulation is already driving businesses away. Energy and manufacturing firms have bolted, and AI innovators like ABBYY Cognigy and SmartAction are increasingly looking to emerging tech hubs like Austin and Dallas for their next big bets. If California keeps up its scattershot approach, more will follow. In addition to our favorable regulatory structure, we're also committed to ensuring Texas small businesses are AI literate , as we work to empower entrepreneurs across our state with the tools and know-how they need to grow, succeed and compete on a larger scale — whether that's statewide, nationwide or in the global marketplace. To California's tech visionaries: Texas is calling. Our low-tax, pro-innovation ecosystem is designed to help you thrive. Want to build the next AI breakthrough without Sacramento's meddling? The Lone Star State is wide open. We'll keep fine-tuning our approach as AI evolves, always putting innovators first. California's tech legacy will continue to fade, so long as lawmakers find new ways to squander it through heavy-handed mandates. Keep burying innovation in red tape, and the next AI revolution will rise in Texas, not Silicon Valley. Glenn Hamer is president and CEO of the Texas Association of Business, the Texas State Chamber of Commerce that represents companies of all sizes and industries across the state.