🔴Relating to the artificial intelligence division within the Department of Information Resources.

HB 2818

🔴 HB 2818: State AI Division Expands Tech Power Inside Government

What it says it does:
HB 2818 creates a new Artificial Intelligence Division inside the Department of Information Resources. It promises to modernize outdated state computer systems and help agencies save time and money using generative AI.

What it actually changes:
It gives the DIR executive director broad discretion to decide which projects qualify for AI work. The division can either build its own systems or hire vendors, and those vendors must perform only a “majority” of the work. Earlier drafts required 90 percent, a stricter standard that was dropped before final passage.

Who is pushing for it:
TechNet, Texas 2036, the Texas Association of Business, AARP Texas, and the City of Houston all registered in support. These groups represent major technology firms, business coalitions, and local government interests seeking modernization contracts or access to shared infrastructure.

Who benefits:
Large AI vendors and corporate technology contractors gain direct access to state procurement streams. DIR gains new authority, staff, and rulemaking power. Policy groups that supported the bill gain data and leverage to promote further automation programs.

Who gets left out or exposed:
Smaller Texas firms that cannot meet the “majority by AI” threshold lose access to future contracts. Agencies and local governments surrender control over which systems are replaced or how AI is used. Everyday Texans bear new costs without clear oversight of accuracy, bias, or data security.

Why this matters long term:
The bill permanently centralizes procurement and modernization decisions inside DIR while weakening independent review. Once this AI division is established, it can expand projects, staff, and budgets indefinitely. The fiscal note already projects millions in recurring costs to the state.

What to watch next:
Watch how DIR defines “appropriate” projects, who receives vendor contracts, and whether cost reports ever include quality or fairness metrics. Future sessions may use this framework to justify broader privatization or automation of state services.

Bottom line:
HB 2818 looks like innovation, but it concentrates technological and financial power inside one agency with limited oversight. It opens a long-term procurement pipeline for corporate AI vendors while leaving Texans with the bill and little transparency over how these systems are chosen or run.

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