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New technology regulation: what does it mean for Silicon Valley?

A California bill bringing world-leading safety measures for large artificial intelligence (AI) systems has cleared a major hurdle in the legislature.

New AI regulation bill ready for signature
Dado RuvicREUTERS

California is on track to pass a bill regulating the actions of large-scale artificial intelligence (AI) models in a move that would be the first of its kind anywhere in the world.

The proposal, SB 1047, was forwarded by State Senator Scott Wiener (Democrat) and mandates safety testing for AI models that exceed a certain level of computing power of cost more that $100 million. None of the models currently in existence have hit that threshold.

The bill was narrowly passed by the state assembly on Wednesday and has also received the necessary approval in the State Senate.

Now, it passes to the desk of Gov. Gavin Newsom to be signed. However Newsom has been less-than-enthusiastic about previous attempts to regulate AI and has not taken a public position on this latest bill.

Governor Gavin Newsom is reticent to curb a thriving industry.
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Governor Gavin Newsom is reticent to curb a thriving industry. Alyssa PointerREUTERS

What is in the California AI bill?

Supporters of the bill have praised it as offering world-leading protections against the rapidly growing power of AI.

Under the bill’s terms, developers would have to outline methods by which they could deactivate the AI models if they were not working as anticipated. This ‘kill switch’ would act as a back-up in case the technology were to go awry. The bill would also offer the state’s Attorney General powers to sue companies if they were not following the new requirements.

Anthropic, one of Silicon Valley’s most prominent AI developers, have spoken in support of the bill. They did, however, insist on a key alteration to the bill that has subsequently been adopted. The bill no longer gives provision for an oversight committee for AI.

Will Gavin Newsom pass the AI bill?

The bill has passed all the necessary steps in the state legislature but is still awaiting final approval from the Governor. The bill will sit on Newsom’s desk until the end of September, during which time he has the power to sign it into law, veto it, or even allow it to become law without signing it.

In the past Newsom has been resistant to efforts to regulate the booming AI sector, which has become a major economic boon for California. Currently, 35 of the world’s top 50 AI companies are based in the state.

Newsom is not the only prominent Democrat to have doubts about the Democrat-led bill. Former House speaker Nancy Pelosi is one of a number of party members to express opposition to the bill, calling it “well-intentioned but ill informed.” It remains to be seen whether Newsom will come down in support of the ground-breaking proposal.

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