AI Law Center: September 2025 Updates
In this month's update:
- AI Regulatory Landscape: Three Things to Know-AI Activity We're Keeping an Eye On-New U.S. State Laws
AI Regulatory Landscape: Three Things to Know
1. Illinois' New AI Law and Its Impact on Behavioral Health Providers
In August 2025, Illinois enacted a comprehensive AI law that imposes significant restrictions on the use of AI tools in healthcare settings. Specifically, the law limits the use of AI without a licensed professional to "administrative" and "supplementary support" services, explicitly excluding therapeutic communications with clients. This means that behavioral health providers must ensure that any AI tools used in their practice are supervised by licensed professionals, particularly during client interactions. Failure to comply with these regulations could result in penalties and potential legal challenges. For a detailed analysis of this law and its implications, refer to our comprehensive guide.
2. Amendments to the Colorado AI Act
The Colorado AI Act, initially set to take effect in January 2026, has undergone significant changes. In August 2025, the governor announced a special legislative session to address the fiscal and implementation impacts on consumers, businesses, and state and local governments. Although lawmakers could not agree on revisions to the law's obligations during the session, they did amend the law's implementation date, delaying it to June 30, 2026. This extension provides stakeholders with additional time to prepare for compliance. For more information on the Colorado AI Act and its current status, visit our dedicated page.
3. Defining "Provider" Under the EU AI Act
The European Union's AI Act has raised questions regarding the definition of "provider," especially concerning downstream actors who modify or fine-tune general-purpose AI models (GPAIMs). Determining whether the original provider, the modifier, or both are responsible for compliance has significant implications for risk allocation across the AI value chain. For a detailed discussion on this topic, refer to our analysis.
AI Activity We're Keeping an Eye On
Multiple California AI Bills Await Governor's Signature
Several AI-related bills are currently on the governor's desk in California, awaiting signature. These bills address various aspects of AI regulation, including transparency, accountability, and ethical considerations. Stakeholders should monitor these developments closely, as they could set significant precedents for AI legislation in other states. For the latest updates on these bills, visit our California AI Law Tracker.
FTC Issues Orders to Chatbot Companies
The Federal Trade Commission (FTC) has recently issued orders to several chatbot companies, seeking information on their data collection practices, user consent mechanisms, and compliance with existing consumer protection laws. This move underscores the increasing regulatory scrutiny of AI technologies and emphasizes the need for companies to ensure transparency and ethical practices in their AI deployments. For more details on the FTC's actions and their potential impact, refer to our analysis.
New U.S. State Laws
AI Healthcare Regulations in Minnesota
Minnesota has enacted new regulations concerning the use of AI in healthcare settings. These regulations focus on ensuring that AI tools used in medical diagnoses and treatments are subject to rigorous validation processes and are transparent in their decision-making. Healthcare providers in Minnesota should review these regulations to ensure compliance and maintain patient trust. For a comprehensive overview, visit our Minnesota AI Law Tracker.
Comprehensive AI Legislation in Rhode Island
Rhode Island has introduced comprehensive AI legislation that addresses various aspects of AI deployment, including ethical considerations, transparency, and accountability. The law imposes specific requirements on companies developing or deploying AI systems, emphasizing the need for clear disclosures and ethical guidelines. Businesses operating in Rhode Island should familiarize themselves with these requirements to ensure compliance. More details are available on our Rhode Island AI Law Tracker.
How We Can Help
At Orrick, we are at the forefront of providing comprehensive AI-related legal solutions. Recognized as a "Standout for AI Expertise" by The American Lawyer in 2024, our team of 350 lawyers globally has delivered transactional, litigation, and regulatory advice to more than 500 clients in the past 12 months. We act for emerging leaders across the AI tech stack—models, apps, and infrastructure—as well as enterprises across all sectors that are transforming their businesses through AI. Our extensive experience enables us to offer unique insights into emerging market trends and forward-looking risk mitigation strategies.
For more information on how we can assist you in navigating the evolving AI regulatory landscape, visit our AI Resource Center.
Note: This blog post is for informational purposes only and does not constitute legal advice.
