California Governor Gavin Newsom has vetoed a landmark artificial intelligence (AI) safety bill, which faced significant opposition from major technology firms. The bill would have introduced some of the first AI regulations in the United States, including safety testing and the inclusion of a "kill switch" to deactivate advanced AI systems in the event they posed a threat. Additionally, it would have required oversight on the development of "Frontier Models," the most advanced AI systems.
Newsom expressed concerns that the legislation could stifle innovation and lead AI developers to relocate out of California, a global hub for advanced technology. He argued that the bill applied overly stringent standards, even for basic AI applications, by failing to differentiate between low-risk and high-risk deployments. This could have an adverse effect on the broader technology sector, which plays a significant role in both the state’s and the nation's economies.
In place of the bill, Governor Newsom announced plans to create safeguards against the risks posed by AI, calling on experts to assist in developing appropriate protections. This follows his recent signing of 17 other bills targeting misinformation and generative AI-driven deep fakes. His administration is keen to strike a balance between innovation and regulation, aiming to protect the public while maintaining California's position as a leader in AI development.
The bill’s author, Senator Scott Wiener, criticised the veto, warning that it leaves AI companies largely unregulated in the US, especially given Congress's inability to pass comprehensive AI legislation. He expressed concerns that, without such regulations, companies could to continue developing an "extremely powerful technology" without any government oversight.
The bill had faced strong opposition from major tech companies, including OpenAI, Google, and Meta, which argued that restrictive regulations would hinder the advancement of a critical technology still in its infancy.
As AI technology continues to evolve, the debate between fostering innovation and ensuring safety remains contentious.
Investors are almost by default exposed to AI technology in their portfolios due to the dominance of technology in US equities.