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AI Update: Sandbox or Sandstorm? AI’s New Playground
The Zelle Lonestar LowdownSeptember 26, 2025
On September 10, 2025, Sen. Ted Cruz (R-TX) introduced the SANDBOX Act (Strengthening Artificial Intelligence Normalization and Diffusion by Oversight and eXperimentation). The bill would grant AI developers regulatory lenience to launch new technologies — but some experts argue that the bill poses risks to consumers’ privacy.
Key Points:
- AI developers and deployers can apply for temporary waivers or modifications of regulations in order to test, experiment, or temporarily provide to consumers AI products or services.
- Companies must show benefits outweigh risks and report harms or incidents.
- Oversight sits with the White House’s Office of Science and Technology Policy (OSTP).
Why it matters:
There are currently no federal regulations establishing broad regulatory authorities for the development or use of AI or prohibitions on AI, although there appears to be bipartisan agreement that some basic AI regulatory protections are necessary, such as a ban on lethal autonomous weapons and requirements that AI programs pass a governmental test before use.
Supporters say the Act will help the U.S. stay globally competitive in AI by cutting through red tape. Critics warn it could weaken consumer protections, privacy, and safety rules—with long waivers allowing risky practices to linger.
What to watch:
- How Congress amends the bill to add safeguards.
- Who gains access to the sandbox (big tech vs. startups).
- The impact on state-level AI regulations.
Ultimately, the SANDBOX Act will be judged on whether it can accelerate AI while also protecting privacy, ensuring fairness, and guarding against discrimination.
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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.
