President Donald Trump has signed a new executive order seeking to discourage states from enacting legislation geared at regulating AI within their jurisdiction. Analysts say this order is especially going to impact California, which has passed more laws regulating AI than any other state in the country.
Under the order, the FCC (Federal Communication Commission), FTC (Federal Trade Commission), and DOJ (Department of Justice) have been authorized to challenge any AI laws passed by states. The order also urges Congress to pass artificial intelligence laws that will take precedence over any related laws passed at state level.
This new executive order gives federal agencies the leeway to consider restricting funding to states that go ahead and pass their own AI laws. The grants that could be withheld include Broadband Equity, Access, and Deployment.
California is likely to be worst hit by this new action taken by the president. The state is expecting approximately $1.8 billion in funding under the Broadband Equity fund. Part of this money had already been earmarked by the state to ensure about 300,000 people get internet access. These funds are now in jeopardy after the signing of the executive order.
Trump says his new order is aimed at preventing firms from having to adhere to different laws in different states. Such a patchwork of laws would risk making the U.S. fall behind its AI rivals because those different laws would slow innovation, he added.
California has recently enacted many laws aimed at regulating AI within its jurisdiction. One law bans algorithms from hiking prices, another requires AI companies to avail tools that people can use to tell which content (photos, videos, and audios, for example) are AI-generated or fakes, another that was soon taking effect requires AI firms to disclose the specific data they relied upon while training their models. In all, lawmakers in California have passed about 12 AI laws this year, and many more are going through the legislative process.
These laws are largely bipartisan, and surveys show that state residents support these measures. For example, a poll undertaken in October by Carnegie Endowment California showed that about 80% of the people in the state agree that AI safety should be prioritized rather than simply supporting innovation.
Critics of this executive order say that California is being put in harm’s way at the hands of AI. They say that the efforts that states are investing in developing their own AI laws are proof that the federal government has failed in its duty of protecting citizens from the potential harms of this industry. If federal laws existed and were designed to purpose, states wouldn’t feel compelled to pass their own laws, the critics add.
California is home to many leading tech companies like Nvidia Corp. (NASDAQ: NVDA), Google, Anthropic, and OpenAI. It remains to be seen how these firms react to the order signed by the president.
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