3 US States Pave the Way on AI Oversight

As governments grapple with the risks posed by increasingly capable AI systems, a growing number of US states are moving toward a model familiar from the financial world: independent auditing.

AI companies would be required to allow qualified outside organizations to examine their systems, policies, and safeguards, helping determine whether developers are meeting legal and safety requirements.

Independent oversight is already a standard feature of corporate finance. Major accounting firms such as Deloitte and KPMG examine the books of large publicly traded companies and certify whether financial statements accurately reflect their operations. Auditors stake their professional reputations on those assessments. The collapse of Arthur Andersen after its role in reviewing Enron’s accounts remains a prominent example of the consequences when that trust breaks down.

AI auditing would apply a similar principle to a different set of risks. Rather than checking financial statements, independent verification organizations (IVOs) would evaluate technical safeguards and regulatory compliance. Their work could include examining a developer’s internal processes and determining whether required protections are actually being implemented.

The National Institute of Standards and Technology provides an important starting point. Its AI Risk Management Framework, developed in 2023, offers guidance for incorporating considerations such as safety, reliability, and accountability throughout the development and use of AI systems. The framework is voluntary and is now being revised.

State governments are increasingly looking to those federal guidelines as a foundation for binding requirements. Three states have taken particularly notable steps.

Virginia lawmakers approved HB 797, directing the Joint Commission on Technology and Science to study how independent AI auditors could be licensed. The commission is expected to develop recommendations that could inform legislation establishing a formal licensing system. If that effort proceeds, Virginia could consider an IVO licensing framework in 2027, potentially creating opportunities for companies specializing in AI compliance and verification.

Illinois has taken a more direct approach. Under SB 315, developers of frontier AI systems must undergo independent audits each year. The legislation also establishes rules governing access to audit information, its retention, and public disclosure. Developers must additionally maintain and update frameworks covering catastrophic risks, cybersecurity, mitigation measures, and internal oversight, while providing transparency reports when deploying new or significantly altered models.

California has pursued two complementary bills. SB 813 calls for stakeholder groups to develop standards and procedures for independent AI auditors, while AB 1405 establishes a state registry for those organizations. Together, the measures aim to create a regulatory structure for an emerging auditing industry.

As frontier AI systems become more capable, independent verification could become an important part of the regulatory landscape. Supporters argue that credible audits can help governments enforce safety rules while giving responsible developers and investors greater confidence that the industry can grow within clear boundaries.

Technology companies like D-Wave Quantum Inc. (NASDAQ: QBTS) could be wondering whether these efforts by states to oversee AI could morph into rules that eventually regulate the industry nationally, and what implications that could have for emerging technologies like quantum computing.

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