Fight Over California Bill Shows How Tricky Regulating AI Becoming

From Concord, New Hampshire to Sacramento, California and the overwhelming majority of state capitols in between, artificial intelligence has been one of the hottest topics in state legislatures this year.

More than 650 bills referring to artificial intelligence have been introduced in 2024, with over 250 of the bills in 34 states dealing substantively with the issue, according to the LexisNexis® State Net® legislative tracking system. Twenty-one of those states have enacted such AI-focused bills.

But the recent fight over an AI proposal in California that was ultimately vetoed by Gov. Gavin Newsom (D) illustrates just how heated—and political—regulating this burgeoning technology is becoming.

OpenAI Expressed Deep Concerns About California Bill

California’s SB 1047, also known as the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, by Scott Wiener (D), in simple terms, would have required major AI developers to implement security protocols to avoid causing mass casualties or major property damage.

The first-of-its kind legislation would have applied to AI companies that spend more than $100 million to train an AI model or over $10 million to modify one, which immediately made the measure a target of Silicon Valley.

In late August, OpenAI, developer of ChatGPT, sent a letter to Wiener and California Gov. Gavin Newsom (D) opposing the bill, “joining a chorus of tech leaders and politicians who have recently come out against the controversial legislation,” as Bloomberg put it.

Jason Kwon, OpenAI’s chief strategy officer, said the bill would squash innovation and could even force tech companies to leave the Golden State.

“A federally-driven set of AI policies, rather than a patchwork of state laws, will foster innovation and position the U.S. to lead the development of global standards,” Kwon wrote. “As a result, we join other AI labs, developers, experts and members of California’s Congressional delegation in respectfully opposing SB 1047 and welcome the opportunity to outline some of our key concerns.”

Nearly Half of States Have Enacted AI-Focused Bills in 2024

More than 250 measures dealing substantively with artificial intelligence have been introduced in 34 states in 2024, according to the LexisNexis State Net legislative tracking system. Twenty-one of those states have enacted such measures.

Former U.S. House Speaker Nancy Pelosi Also Opposed Bill

To underscore just how politicized AI discussions have become, U.S. Rep. Nancy Pelosi (D-CA), not only a fellow Democrat, but also from the Bay Area like Wiener, came out in vocal opposition to the California bill, calling it ill informed.

“The view of many of us in Congress is that SB 1047 is well-intentioned but ill informed,” the former House Speaker said in a statement. “Prominent California leaders have spoken out, including Representatives Anna Eshoo and Ro Khanna who have joined other House Members in a letter to Governor Gavin Newsom opposing the bill. While we want California to lead in AI in a way that protects consumers, data, intellectual property and more, SB 1047 is more harmful than helpful in that pursuit.”

Wiener Defended Legislation

Wiener responded to the criticism by publicly defending his legislation.

“The Assembly will vote on a strong AI safety measure that has been revised in response to feedback from AI leaders in industry, academia, and the public sector,” the senator posted on X, formerly known as Twitter.

The post also referenced Wiener’s work with Anthropic, a San Francisco-based AI safety and research company, stating: “We can advance both innovation and safety; the two are not mutually exclusive. While the amendments do not reflect 100% of the changes requested by Anthropic—a world leader on both innovation and safety—we accepted a number of very reasonable amendments proposed, and I believe we’ve addressed the core concerns expressed by Anthropic and many others in the industry. These amendments build on significant changes to SB 1047 I made previously to accommodate the unique needs of the open source community, which is an important source of innovation.”

The post concluded with Wiener asserting that “With Congress gridlocked over AI regulation—aside from banning TikTok, Congress has passed no major technology regulation since computers used floppy disks—California must act to get ahead of the foreseeable risks presented by rapidly advancing AI while also fostering innovation.”

Bill Garnered Unlikely Ally in Elon Musk

If that didn’t complicate things enough, Wiener’s bill was endorsed by one of the unlikeliest of supporters: Elon Musk, the tech billionaire who is perpetually complaining about California’s regulation.

“This is a tough call and will make some people upset,” Musk wrote on X, the ubiquitous social media platform he famously purchased in 2022, “but, all things considered, I think California should probably pass the SB 1047 AI safety bill.”

Fight Shows AI Now Main Front in Ongoing State-Tech Battle

Musk was in the minority. According to analysis by the California Senate, opponents of SB 1047 outnumbered supporters by 3 to 1. That didn’t stop both chambers of the California Legislature from passing the measure overwhelmingly.

But late last month Newsom vetoed the bill, saying it was too focused on the biggest AI systems. The measure “applies stringent standards to even the most basic functions—so long as a large system deploys it,” he said in statement. He also said the bill could use a deeper analysis of the potential risks and consumer harms of AI, and he urged lawmakers to rewrite the legislation next year.

Had it been enacted, the measure could have become a national standard for regulating AI. But the fight over the bill still reflects AI’s emergence as a major new front in the ongoing battle between states and the tech industry, after years of fighting over data privacy and other issues. And it’s shaping up to be a particularly complex battleground.

—By SNCJ Correspondent BRIAN JOSEPH

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