Amy Tong, who shaped California's approach to artificial intelligence as the state's chief information officer, has left government to lead a new AI practice group at lobbying firm Ballard Partners, signaling how AI governance has become a lucrative and strategically important business. The move reflects a broader shift: as governments worldwide grapple with AI regulation, companies and organizations are increasingly willing to pay for expert guidance on navigating the intersection of technology and public policy.

Why Is AI Governance Suddenly a Business Opportunity?

Tong spent 30 years in California state government, most recently overseeing a $67 billion portfolio in government operations and managing more than $8 billion in technology investments. During her tenure, she led the development of California's first statewide generative AI strategy, which became a model for other states. Her departure from government on January 31, 2026, and immediate transition to the private sector underscores a critical gap: organizations need help understanding how to adopt AI responsibly while staying ahead of evolving regulations.

Ballard Partners, a major lobbying and consulting firm, launched the new Emerging Technology and AI Practice Group specifically to meet this demand. The firm said the practice group reflects "growing demand from organizations seeking guidance on AI governance, procurement, regulatory issues and government engagement". This isn't just about compliance; it's about competitive advantage.

What Did Tong Actually Do in California?

Tong's track record in government gives her credibility in the private sector. In 2023, California issued its first executive order governing generative AI use in state government, establishing guidelines for evaluating AI tools, procurement practices, and risk management frameworks that influenced other states' approaches. The state then recruited five companies to develop pilot projects across customer service, health care facility inspections, highway traffic management, public safety, and language accessibility.

Since those pilots, California has deployed generative AI tools more widely across state agencies to improve traffic flow, road safety, and customer service. The state also launched Poppy, a digital assistant for internal government use, in September 2025. These concrete implementations, rather than just policy discussions, give Tong practical experience that organizations now want to tap into.

How to Navigate AI Governance as an Organization?

• Treat governance as foundational, not an afterthought: Research from advisory firm Kaleidoscope found that organizations adopting AI without building governance architecture create fragility rather than advantage. Responsible AI requires establishing governance, ownership, oversight, resilience, inclusion, and the ability to explain systems being built.
• Focus on specific use cases rather than scaling everywhere at once: According to Kaleidoscope's research, organizations attempting to scale AI everywhere simultaneously are stalling, while those going "deep and narrow" on one problem or use case are seeing measurable results and proving return on investment.
• Use regulation as a planning tool, not just a compliance burden: Organizations that treat emerging regulations as signals of where the world is heading gain structural advantage by building toward requirements before they become mandatory.

Tong herself emphasized this balanced approach in her new role. "I just feel at this moment when AI is evolving so rapidly, we really need to find a way to curb the development of AI, but not so much that we stifle the innovation, and with a very balanced approach," she said. "We can focus on actual application of AI as opposed to a lot of conversation around developing the tool".

What's the Federal Governance Gap?

One of Tong's stated priorities in her new role is pushing federal officials to establish nationwide AI regulation. "When it comes to AI, there's been a lot of conversation that you don't want a fragment of these states of AI regulations," she noted. "California does what needs to be done to set something going in the absence of a federal level regulation, but I think we can get the federals to move on a responsible growth environment for AI".

This fragmentation problem is real. Without federal standards, companies must navigate a patchwork of state-level rules, creating compliance complexity and uncertainty. The Atlantic Council Commission on AI recently laid out a comprehensive roadmap for US AI leadership, emphasizing that "a durable federal governance framework must address risk tiering, data governance, transparency, and incident reporting".

The Commission also stressed that federal governance should leverage government adoption to drive innovation across sectors, but this requires modernizing federal procurement systems. The broader challenge, according to the Commission's research, is that "US leadership in AI will not be determined by any single action, but by many actions pursued through a connected, coherent, and comprehensive approach".

Why Does This Matter Beyond Government?

Tong's transition from public sector to private sector consulting reflects a maturation of the AI governance market. For 30 years, she operated inside bureaucracy, pushing it to operate differently. Now, she said, she'll "actually get to experience that in the private sector, where entrepreneurship is key". This suggests that AI governance expertise, once confined to government, is becoming a valuable commodity for enterprises, nonprofits, and other organizations.

The Atlantic Council Commission identified a critical insight: "Building citizens' confidence in AI, while demonstrating clear safeguards and tangible benefits, is a prerequisite for the United States to compete effectively". This means governance isn't just a regulatory checkbox; it's essential to public trust and, ultimately, to the success of AI adoption itself.

As AI systems become more integrated into critical infrastructure, healthcare, finance, and public services, the demand for people who understand both the technology and the policy landscape will only grow. Tong's move signals that this expertise now commands premium compensation in the private sector, and that organizations recognize governance as a competitive differentiator, not a cost center.