As AI development and adoption accelerate, business leaders grapple with rapid shifts in how or whether to use these powerful, evolving tools. Adding to the complexity of these AI governance questions is the new administration’s extensive reversal of prior AI policies, signaling a shift toward deregulation at the same time that global frameworks like the EU AI Act impose stricter compliance burdens. Boards and executives must navigate these competing pressures while ensuring AI-driven innovation remains strategic and responsible.

As part of Nelson Mullins’ Securities and Corporate Governance Practice Group’s ongoing discussion series on business risks and board considerations, partner Jeff Kelly examined recent trends in AI adoption and the evolving policy environment in a presentation, “Artificial Intelligence in Practice and Navigating the New Administration’s AI Priorities.” With AI playing an increasing role in corporate strategy, governance teams must weigh both the opportunities and the legal, ethical, and operational challenges that come with it.

Although we are still in the early days of the Trump Administration, his executive orders revoked prior guidance on AI policy. Similarly, his Executive Order on “Removing Barriers to American Leadership in Artificial Intelligence” set aggressive timelines for preparing an AI action plan by July 22, 2025. However, several trends are emerging:

• AI governance will require a playbook to keep up: Business progress and competition will drive policy in the new administration. With recent advances in generative AI and agentic systems becoming more accessible, we can expect AI adoption to continue to pervade most business functions. Global competition in AI, such as DeepSeek, may drive the new administration to pursue more aggressive and competitive policies.
   
• The “light touch” policy toward AI may still lead to regulatory challenges: The United States continues to have a patchwork of state and local AI regulations. Even though President Trump revoked Biden-era AI policies and prioritizes deregulation, there will be ongoing federal preemption issues or states seeking to codify Biden-era AI policies and regulations.
   
• Boards should take a long view on AI oversight: With federal regulations in flux, corporate boards and legal teams must proactively take a longer view of AI risks. As the past weeks have demonstrated, executive orders and policies can be susceptible to the political pendulum swinging. However, several bipartisan reports and voluntary risk management frameworks for AI governance have emerged over the past year. Boards will do well to use these guideposts to proactively assess AI risks, implement responsible governance frameworks, and stay ahead of evolving state and global compliance requirements.

For companies using or investing in AI, the need for clear oversight and strategic foresight has never been greater. Businesses that take a proactive approach to AI governance will be best positioned to adapt to shifting regulatory expectations while maximizing AI’s potential.

This presentation was led by Raleigh partner Jeff Kelly during the recent Securities and Corporate Governance industry group’s recent meeting. To learn more about this industry group, view the Securities and Corporate Governance practice page here.

Jeff focuses his practice in areas of emerging technology, particularly in areas involving data analytics, artificial intelligence, digital assets, and FinTech. He works closely with entrepreneurs and companies to effectively navigate changing regulations, government investigations, and complex corporate and securities law challenges.

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