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Artificial intelligence (AI) has already begun transforming the U.S. economy. This has led to a flurry of bills in legislatures across the country looking to regulate the new technology.

But the most important question may not be how the government influences the rise of AI.  The most important question may be how AI influences the business of government.

Governing With AI

In the last few months, I have led an initiative to streamline state agency regulations using AI tools.  This builds on over three years of previous work undertaken by the office I lead, the Virginia Office of Regulatory Management (ORM).  Over the course of Governor Glenn Youngkin’s Administration, we have implemented reforms that save Virginia citizens over $1.4 billion per year and streamline over 35% of the requirements in the Virginia Administrative Code. 

A recently issued report catalogues these successes.

Virginia ORM began using AI technology relatively late in its overall regulatory modernization initiative because the technology has gotten significantly better since we started.  So-called agentic AI, which uses a team of AI “agents” that are assigned different tasks, is far more effective at parsing dense legal text than its predecessor technologies.

In Virginia, we’ve used AI to do the following tasks:

  • Compare regulations to their authorizing statutes to see what agencies can (or must) change

  • Perform preliminary cost-benefit analyses of every regulation to see which ones feature high costs and low benefits

  • Compare Virginia regulations to those in other states, identifying more effective approaches

  • Identify overlapping provisions across regulations

  • Scan lengthy incorporated documents and find streamlining opportunities

  • Rewrite both regulations and guidance documents to make them clearer and shorter

Since this initiative began relatively recently, it is only now yielding results.  I anticipate that, in the coming months and years, Virginia agencies will be implementing a variety of reforms to regulations and guidance documents in response to this analysis.

Making AI a Permanent Part of Regulatory Review

The incoming administration will have an opportunity to lock in and build on these reforms.  Executive Order 51 makes AI analysis a permanent feature of regulatory review, requiring agencies to call on AI insights when discharging their duty to review every regulation and guidance document on a four-year cycle.

One particularly promising place to look for streamlining opportunities is in external documents “incorporated” into the regulatory code. When agencies write regulations, they often rely on rules that don’t appear in the law and instead direct the reader to external documents to determine what’s required. The problem is that many of these outside documents are copyrighted and sit behind paywalls.

That means the government and businesses sometimes have to pay just to read the rules they are legally required to follow.

In Virginia, these external documents account for a significant portion of the regulatory burden. Of roughly 335,000 regulatory requirements, about 240,000 are contained in these “incorporated documents” rather than in the public code itself. While Virginia agencies eliminated 57,000 requirements over the past four years, tens of thousands remain, with some locked behind paywalls.

AI offers a way out of this problem.

AI tools can scan external documents, identify the specific provisions that create legal obligations, and rewrite them in plain regulatory language. Agencies can then publish those rewritten requirements directly in the regulatory code.

In short, AI not only helps streamline the law but also reduces the cost and simplifies the process of researching and understanding it.  

The Virginia Model and What Comes Next

Going forward, Virginia agencies could also develop compliance chatbots to help users determine which statutes and regulations apply to a given activity.  This should prove especially valuable for small businesses, which often have a harder time navigating the regulatory thicket than do their larger peers.

For other states, Virginia’s trailblazing work creates exciting new opportunities.  Virginia’s regulatory reforms took years to implement because almost all the work was performed by human beings.  A state looking to replicate Virginia’s success could shave months or even years off the timeline by starting with an AI-driven analysis of the entire regulatory code.

There will still be plenty of work for human regulators.  Agency employees must then go through the AI analysis and decide what to change. 

But AI tools can act like a small army of researchers, identifying potential changes and helping users navigate the regulations that remain.

In the last four years, Governor Youngkin’s Administration has proven the wisdom of Justice Brandeis’s insight that a “single courageous state” can blaze a trail and inspire its peers.  As we finish our time in office, we are excited to see the “Virginia Model” spread nationwide as state governments call upon AI to modernize laws that have become hopelessly outdated and create a regulatory system that embraces rather than stifles innovation.

Thumbnail image credit: Official Photo by Kaitlyn DeHarde, Office of Governor Glenn Youngkin