California state legislature passes artificial intelligence safety bill despite industry opposition.
Reuters reported on Wednesday (August 28) that the bill needs one more vote before it goes to Governor Gavin Newsom, who has until the end of September to decide whether to sign the bill into law or veto it.
Senate Bill 1047 would require AI companies to conduct safety testing for models that cost more than $100 million to develop or require a certain amount of computing power. Additionally, AI developers in California would have to establish a way to shut down their models if something goes wrong.
The bill, authored by state Sen. Scott Wiener, aims to mitigate catastrophic risks associated with AI. Technology companies such as OpenAI have criticized the bill, arguing it could drive AI companies out of the state and stifle innovation.
The one exception is Elon Musk, head of Tesla and social platform X. Earlier this week, Musk voiced his support for the bill in a post on X.
“For over two decades, I have advocated for regulating AI, just as we do for any product or technology that poses potential risks to the public,” Musk wrote, adding that the decision was a “difficult one” and would likely upset some stakeholders.
This is a tough call, and it will upset some people, but all things considered, I think California should probably pass SB 1047, the AI Safety Bill.
For more than 20 years, I have advocated for regulating AI, just as we do for any product or technology that poses a potential risk.
— Elon Musk (@elonmusk) August 26, 2024
Industry experts say the bill's impact on e-commerce will be significant: Aditi Godbole, senior data scientist at software company SAP, told PYMNTS that more than 63% of e-commerce platforms use AI models for recommendation engines, dynamic pricing, real-time personalized search, smart collections and conversation-building tools.
“Many parts of the bill are complex, ill-defined, lack granularity and are unfriendly to small businesses and start-ups in the e-commerce sector,” she said.
Among her concerns is mandatory safety testing of AI, which she said could stifle innovation in e-commerce features such as personalized shopping.
Meanwhile, other states are considering their own AI bills. This month, the Texas Senate Commerce Committee held a nearly four-hour hearing to hear testimony about the wide-ranging impacts of AI, from improving the efficiency of state agencies to concerns about misinformation, biased decision-making and consumer privacy violations.
To stay up to date on all things PYMNTS AI, subscribe to our daily AI newsletter.
