Key takeaways
- A new AI bill has passed in California specifically targeting big AI companies, covering how the safety of new AI tools can be measured and ensured.
- 32 out of the 50 big AI companies are based in California, meaning that the bill could have a big impact on how the entire industry operates.
- Governor of California Gavin Newsom said in a statement to Congress that the bill should serve as an example of what federal-level AI policy could look like, but some experts have warned that the bill could place the responsibility of AI regulation on individual states, rather than Congress.
A new AI bill focused on big AI companies has come into effect in California. Known as SB-53, the bill is one of the first in the US seeking to regulate these companies with a focus on the safety of tools being developed.
The bill requires big California-based AI companies, which include Anthropic and Nvidia, to publish public documents on how they are ensuring safety and report any dangerous circumstances.
As the bill is the first of its kind, we could begin to see more federal AI policy enacted. However, some experts argue that this could also put the expectation on individual states to create their own AI policies.
AI Bill Targeting Big Companies Takes Effect in California
Governor of California Gavin Newsom signed the Transparency in Frontier Artificial Intelligence Act, known as SB-53, into California’s state laws on Monday. It becomes one of the first bills in the US to place new regulation on big AI companies.
SB-53 requires these big companies to provide a certain level of transparency and report AI-related safety incidents. Penalties for noncompliance are also in effect, and companies risk fines of up to $1 million per violation.
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In a statement, Newsom has said: “California has proven that we can establish regulations to protect our communities while also ensuring that the growing AI industry continues to thrive. This legislation strikes that balance.”
What Does The Bill Mean for Big AI Companies?
As it stands, of the world’s top 50 AI companies, 32 are based in California, including Anthropic, OpenAI, and Meta.
Under the new bill, companies are now required to publish public documents detailing how they are following best practices to create safe AI systems. Likewise, they will be able to report severe AI-related incidents to California’s Office of Emergency Services, and protections will also be put in place for whistleblowers who raise concerns about health and safety risks in relation to AI.
Similarly, companies with more than $500 million in revenue will have to assess the risk that their technology could become autonomous and resist human control, or aid in the development of bioweapons. All of these assessments should be disclosed for public viewing.
Could Federal Policy Around AI Follow Suit?
In a signing message to the state Senate, Newsom wrote that California’s position in the tech world gives it the opportunity “to provide a blueprint for well-balanced AI policies beyond our borders – especially in the absence of a comprehensive federal AI policy.” Newsom also said that the new bill fills a gap left by Congress, which so far has failed to pass any AI legislation on a federal level.
As AI companies continue to develop at a fast pace, and safety around systems becomes more of a concern, California could pave the way for more AI legislation on a federal level.
However, it could also set a discerning precedent that states will have to “take the lead in governing the national AI market” as opposed to Congress. As a result, startups may have to navigate various “patchwork” compliance regimes, according to Colin McCune, head of government affairs at Silicon Valley venture capital firm Andreessen Horowitz.
It could also mean that businesses in different states could be subject to different laws when using AI, which could make expanding and scaling specific tools difficult in the long run.
