The AI Governance Wave MSPs Can't Afford to Ignore
Just like the evolution of Cloud and Hybrid many years ago, AI is changing the architecture of IT Infrastructure, expanding the edge, and blurring the lines of what MSPs take ownership of for their clients. While AI technology still feels abstract to many, those responsible must apply the same controls across the stack — in terms of security and data governance — that we always have.
It pains me when I hear about AI training programs that focus on educating employees how to avoid uploading sensitive material. While awareness training shows good intention, it's insufficient without architectural changes. Business Email Compromise hasn't been eliminated — it's evolving. We've spent so much time, money, and energy establishing security standards. So why are we treating AI differently?
While this message may sound like harsh criticism, I do live in the real world. I understand these are not easy problems to address. But the regulatory landscape isn't waiting for us to figure it out.
The Numbers Are Staggering
In 2025 alone, 1,208 AI-related bills were introduced across all 50 US states. 145 of those were enacted into law. That's not a trend — it's a wave.
As of January 1, 2026, several major laws took effect, including California's Transparency in Frontier AI Act (TFAIA) and Texas's Responsible AI Governance Act (RAIGA). Colorado's AI Act — arguably the most consequential for MSPs — was delayed from February 1 to June 30, 2026 via SB 25B-004, giving organizations a few more months to prepare.
Here's what Colorado's law requires for high-risk AI systems: documented risk management programs, impact assessments, consumer disclosures, and publicly available risk summaries. Violations carry penalties up to $20,000 per violation under the Colorado Consumer Protection Act — and violations are counted per consumer, per transaction. The math gets ugly fast.
And at the federal level, a December 2025 executive order proposed a uniform federal AI policy framework that could preempt inconsistent state laws — adding yet another layer of uncertainty for organizations trying to build compliance programs.
Cyber Insurance Is Already Moving
If you've been through the cyber insurance renewal cycle recently, you've noticed the AI questions are getting more specific. Insurers are now introducing AI Security Riders that require documented evidence of adversarial red-teaming, model-level risk assessments, and specialized safeguards as prerequisites for underwriting.
Organizations without demonstrable AI governance face coverage limitations or higher premiums. This should sound familiar — it's the same playbook we saw with Advanced Threat Protection and SIEM. Technologies that were once "nice to have for large organizations" became requirements for coverage after insurers took massive hits.
Similarly, most MSPs have already decided it's not worth the risk to onboard clients who refuse to implement basics like Multi-Factor Authentication. AI governance is on the same trajectory.
ISO/IEC 42001: The Standard Nobody's Talking About Yet
ISO/IEC 42001 is the first international standard for an Artificial Intelligence Management System (AIMS). Published in December 2023, adoption is accelerating — driven largely by the EU AI Act, whose Commission enforcement powers begin August 2, 2026.
For MSPs, this standard matters because it provides a structured framework for managing AI risks that maps to the kind of controls your most security-conscious clients will demand. It covers the full AI lifecycle: development, deployment, monitoring, and retirement.
The MSPs who pursue this certification early will have a competitive advantage. The ones who wait will be scrambling when their enterprise clients start requiring it in vendor assessments.
The Deepfake Problem Is Real
169 deepfake-related laws have been enacted since 2022. 146 deepfake bills were introduced in 2025 alone. The TAKE IT DOWN Act, signed in May 2025, criminalized non-consensual intimate deepfakes with up to 2 years imprisonment and requires covered platforms to remove content within 48 hours of a valid takedown notice.
In regulated industries like banking, you're likely already seeing focus on deepfake detection and enhanced KYC controls. Detection technology spending surged 40% globally, but here's the uncomfortable truth: synthetic media has advanced faster than organizational defenses. Most organizations still lack access to AI-driven authentication systems for video and audio analysis.
For MSPs serving financial services, healthcare, or legal clients, this gap represents both risk and opportunity.
Before You Think "This Isn't Our Problem"
Before you think to yourself "our clients leverage ChatGPT and Claude as third-party tools — these are non-issues for us," I'm curious about your experience managing security and policies across many single-tenancy environments. Most of the AI solutions you'll use to transform your own business aren't so cut and dry, either.
How long before the burden is placed on you and your clients? How many difficult discussions will take place in the middle of a cyber response and remediation event?
Questions Every MSP Should Be Asking Today
- What specific problem are we solving, and can we measure the baseline cost?
- Do we have governance controls that would satisfy our most security-conscious client?
- Can we price this for value instead of just cost-plus labor?
- Are we prepared for AI-specific questions on the next cyber insurance renewal?
- Have we evaluated ISO/IEC 42001 against our current compliance frameworks?
These aren't theoretical concerns. Colorado enforcement begins in June. The EU AI Act enforcement begins in August. Cyber insurers are already adjusting their underwriting criteria. The window for proactive preparation is closing.
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