• Atlanta
• Boston
• Dallas
• Ft. Lauderdale
• London
• Minneapolis
• New York
• Oakland
• Philadelphia
• Washington, DC

by Jennifer Gibbs

California Gov. Gavin Newsom recently vetoed a landmark bill aimed at establishing safety measures for large AI models after the tech industry raised objections, cautioning it could drive AI companies from the state and hinder innovation.

The decision to veto the bill delivered a significant blow to attempts to rein in the rapidly evolving industry with little oversight. The bill would have mandated safety testing for many of the most advanced AI models. Developers of AI software operating in the state would have also needed to outline methods for turning off the AI models, effectively a kill switch. The bill would have established a state entity to oversee the development of so-called "Frontier Models" that exceed the capabilities present in the most advanced existing models.

Earlier this month, Newsom told an audience at Dreamforce, an annual conference hosted by software giant Salesforce, that California must lead in regulating AI in the face of federal inaction but that the proposal "can have a chilling effect on the industry."

The proposal, which drew fierce opposition from startups, tech giants and several Democratic House members, could have hurt the homegrown industry by establishing rigid requirements, Newsom said.

"While well-intentioned, SB 1047 does not take into account whether an AI system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data," Newsom said in a statement. "Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it. I do not believe this is the best approach to protecting the public from real threats posed by the technology."

The United States is already behind Europe in regulating AI to limit risks. The California proposal wasn’t as comprehensive as regulations in Europe, but it would have been a good first step to set guardrails around the rapidly growing technology that is raising concerns about job loss, misinformation, invasions of privacy and automation bias, supporters said.

But even with Newsom’s veto, the California safety proposal is inspiring lawmakers in other states to take up similar measures, said Tatiana Rice, deputy director of the Future of Privacy Forum, a nonprofit that works with lawmakers on technology and privacy proposals. “They are going to potentially either copy it or do something similar next legislative session,” Rice said. “So it’s not going away.”

In late August, the Texas Senate Business and Commerce Committee heard over 4 hours of testimony on the use of AI, in both the public and private sectors. Several state agencies, such as the Office of the Attorney General, the Department of Insurance, and the Workforce Commission, have already begun implementing AI and similar programs internally.

As Texas lawmakers prepare for the 89th Legislative Session, set to begin in January 2025, their recommendations regarding the proper regulation of AI will likely play an important role in shaping the future of AI governance in the state and throughout the country. 

______________________________________

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.