Technology companies today are increasingly caught between regulatory requirements from the European Union (EU) and California. While the U.S. federal government may take a moderate, pro-innovation approach, state legislation in California could undermine that approach through regulation, with impacts far beyond its borders.
A new california bill A strict regulatory regime has been imposed on artificial intelligence (AI), making it the latest technology in a squeeze between Brussels and Sacramento that could stifle innovation. the term The “Brussels effect” usually refers to the huge influence of EU policies (especially in the field of technology) as a de facto global standard. But now, businesses are also experiencing the “Sacramento effect,” where California’s strict regulations effectively set de facto federal policy for the rest of the country.
California isn’t the only state working on major tech policy legislation. Colorado recently enacted Noteworthy Artificial Intelligence Regulations, Montana Trying to ban TikTok, Many states are enacting data privacy or youth online safety regulations.
For better or worse, states can move faster than Congress and serve as laboratories of democracy. However, this elasticity also risks creating a fragmented technology policy landscape, with regulations in one state placing a heavy burden on the entire nation. This is especially true in California.
The implications are far-reaching, not only because many of the leading technology companies are located in California, but also because of the nature of the technology that California seeks to regulate. For example, in some cases the only feasible way to implement regulations is at the national level. When it comes to data privacy, these laws apply to California residents even if their actions occur outside the state’s borders, prompting companies to adhere to broader compliance to avoid falling into legal pitfalls.
While some of these laws may be challenged while dormant terms of business, without judicial intervention, they become de facto federal policy. Many companies find it easier to comply with California’s strict regulations than to deal with varying standards between states and risk noncompliance.
This dynamic was evident in 2018, when California promulgate Its approach to data privacy regulation. Now, we’ll soon see California—Through regulations or legislation—Disrupting the key AI innovations happening right now. Unlike some technologies, such as self-driving cars, in most cases the development of large-scale language models and other fundamental artificial intelligence models cannot simply be removed from the country due to regulations.
Actions by states like California and others may be ‘best case scenario’ Colorado It may be a patchwork of AI regulations, but more realistically, California’s proposal, if it becomes law, will stifle innovation by creating a costly compliance regime. This will limit the development of artificial intelligence to only the largest companies that can afford these costs, and will come at the expense of investment in product improvements.
Additionally, beneficial AI applications may be hampered by other proposals currently being considered by the California Legislature. As R Street’s Adam Thierer noted in an article analyze Amid state laws surrounding the AI revolution, the California Legislature considers various anti-AI bills that could “No self-checkout in grocery and retail stores and Ban the use of artificial intelligence in call centers Agencies that provide government services make things less efficient.
It’s not just legislation that could lead California to undermine innovative approaches to artificial intelligence. California Privacy Protection Authority (CPPA) established under the California Data Privacy Act suggested A supervisory framework for “automated decision-making”. EU General Data Protection Regulation programme How data privacy regulations can inadvertently stifle the development of artificial intelligence by imposing compliance requirements on older technologies. Regulating “automated decision-making” could allow the CPPA to play an unexpectedly important role in hindering artificial intelligence and artificial intelligence. other Useful algorithmic uses.
U.S. tech innovators and entrepreneurs are already facing challenges from the European Union’s strict artificial intelligence regulations. Without a federal pre-emptive or alternative framework, they could also be stymied by a heavy hand from Sacramento. This sandwich of significant regulation could harm not only the tech industry’s economy, but also all Americans who benefit from advances in artificial intelligence, as the policy preferences of a single state or region determine the national landscape.
