AI Regulation & Policy

Today's Stories

1. 1

   NY governor uses AI to review all state rules, finding outdated laws

   New York Governor Kathy Hochul revealed that her team is using AI to analyze every regulation and policy in the state to identify outdated legislation. Examples include a $25 fee to take a dog hunting and a requirement for pregnant people to obtain a permit to work after midnight. Hochul said the review, which would have taken five years at staff level, was completed in a couple of months with AI. The review allows Hochul and state agencies to remove outdated rules that no longer serve residents. Hochul framed AI as a tool to make government more responsive and efficient, stating 'I want a government that's not on your back but on your side.' The move comes even as New York has paused new hyperscale data centers (large cloud computing facilities) for up to a year due to concerns about utility costs and natural resources.

   Hochul indicated she plans to use AI to make 'dramatic changes' across state government and suggested that other levels of government should adopt similar practices. New York lawmakers are developing regulations for data centers while the state advances its own AI deployment.

2. 2

   Microsoft faces Windows antitrust probe and New York data center freeze

   The Browser Choice Alliance accused Microsoft of using browser bundling and dark patterns in Windows to steer users toward its Edge browser. Separately, New York issued an executive order placing a moratorium on new large-scale data centers, and other US states are considering similar restrictions. These developments directly threaten two core pillars of Microsoft's business—Windows (where antitrust scrutiny of browser promotion could lead to new compliance costs) and cloud infrastructure (where data center capacity limits could slow AI buildout plans). If more states follow New York's lead, Microsoft and other large cloud providers may face material operating constraints across regions.

   Regulators' formal actions on Windows design choices and how Microsoft adapts its AI infrastructure strategy across states; these responses could reshape capital allocation and project timelines for Microsoft and its peers in large-scale cloud computing.

3. 3

   Japan revises AI policy guidelines, ups cybersecurity focus

   Japan's government adopted revised AI policy guidelines at a Cabinet meeting on Tuesday, less than a year after compiling the original guidelines in December. The revision emphasizes strengthening defenses against cyberattacks targeting AI systems and calls for closer collaboration with foreign governments and AI companies to boost Japan's AI Safety Institute. The revision reflects growing concern that advancing AI capabilities create serious cybersecurity risks. Japan is also signaling a strategic pivot toward reducing dependence on specific foreign countries or companies for AI, and aims to develop domestic AI solutions suited to Japan's own challenges — a shift that may shape how Japanese businesses source and deploy AI technology.

   The guidelines highlight emerging priorities including vertical AI (specialized for specific sectors), physical AI (for robotics control), and a commitment to study how humans and AI should divide responsibilities — signaling where Japan plans to invest and innovate in AI going forward.

4. 4

   Vertex Inc. trading near 52-week low as Q1 2026 shows free cash flow turnaround

   Vertex, Inc. (NASDAQ: VERX), a provider of indirect tax compliance software, is trading at $12.48 as of July 14, 2026, near its 52-week low of $10.21. Q1 2026 results, reported on May 7, 2026, showed total revenues of $196.6 million（約310億円） (11.1% year-over-year growth), cloud revenues of $96.8 million（約150億円） (20.7% growth), and a critical positive inflection in free cash flow to $7.659 million（約12億円） from negative $12.250 million（約20億円） in Q1 2025. The company's Value Creation Plan, announced in April 2026, targets $60 million（約96億円） to $70 million（約110億円） in annualized cash savings beginning in 2027. Vertex operates in a compliance software market projected to grow from $40.82 billion（約6.5兆円） in 2026 to $74.12 billion（約12兆円） by 2031 at a 12.67% compound annual growth rate, driven by escalating regulatory complexity and digital transformation. Despite trailing-12-month losses (TTM EPS of −0.04), the free cash flow turnaround and strong cloud revenue growth signal a path toward profitability. The company's market capitalization of $2.02 billion（約3200億円） and price-to-sales ratio of 2.63 appear to discount both the strength of its recurring revenue model and its positioning in an essential, expanding compliance market.

   Vertex's Q2 2026 earnings report is scheduled for August 5, 2026, which management expects will demonstrate execution on its profitability targets. The company's FY2026 revenue guidance stands at $823.5 million（約1300億円）–$831.5 million（約1300億円）, with adjusted EBITDA of $202.0 million（約320億円）–$208.0 million（約330億円）. Cloud revenue is guided at approximately 25% growth for FY2026. Additionally, in April 2026, Vertex announced new AI capabilities embedded in Vertex Cloud to enhance tax and compliance workflows, and the company's solutions are now available on the Oracle Marketplace.

5. 5

   Sandler Partners, Liminal Team Up on Enterprise AI Governance

   Sandler Partners, the nation's leading independent technology distributor, announced a strategic partnership with Liminal, a provider of enterprise AI governance and enablement software. The deal gives Sandler's network of more than 10,000 technology experts access to Liminal's platform to offer clients. As organizations adopt AI tools, they need security, data protection, and policy control. Liminal's platform lets clients use models from OpenAI, Anthropic, Google, and others while maintaining governance and data security — addressing what Sandler calls a rapidly growing area of customer interest.

   The partnership reflects both companies' focus on helping businesses adopt generative AI securely. Sandler operates a diverse portfolio of 220+ Providers, positioning this deal as one solution among many it can offer to its partner network.

6. 6

   OpenAI proposes 'reverse federalism' for US AI governance

   OpenAI has outlined a governance approach it calls 'reverse federalism,' in which state-level laws can help construct a national framework for AI safety and democratic principles. Currently, AI governance lacks a unified national standard in the US, and OpenAI's proposal suggests state experimentation could inform federal policy rather than federal mandates flowing down—potentially offering a faster, more adaptable path to establishing safety norms across the industry.

   This framing mirrors debates in other sectors where state innovation precedes federal action; whether Congress and state legislatures adopt this model will shape how AI safety standards emerge over the coming years.