AI regulation ban meets opposition from state attorneys general over risks to US consumers

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By Jody Godoy

(Reuters) -A Republican proposal to block states from regulating artificial intelligence for 10 years drew opposition on Friday from a bipartisan group of attorneys general in California, New York, Ohio and other states that have regulated high-risk uses of the technology.

The measure included in President Donald Trump’s tax cut bill would preempt AI laws and regulations passed recently in dozens of states.

A group of 40 state attorneys general, including Republicans from Ohio, Tennessee, Arkansas, Utah and Virginia and other states, urged Congress to ditch the measure on Friday, as the U.S. House of Representatives’ budget committee geared up for a Sunday night hearing.

“Imposing a broad moratorium on all state action, while Congress fails to act in this area is irresponsible and deprives consumers of reasonable protections,” said the group.

The attorney general from California — which is home to prominent AI companies, including OpenAI, Alphabet, Meta Platforms and Anthropic — was among the Democrats who signed the letter.

“I strongly oppose any effort to block states from developing and enforcing common-sense regulation; states must be able to protect their residents by responding to emerging and evolving AI technology,” Attorney General Rob Bonta said.

California implemented a raft of bills this year limiting specific uses of AI, illustrating the kind of laws that would be blocked under the moratorium.

Like several other states, California has criminalized the use of AI to generate sexually explicit images of individuals without their consent. The state also prohibits unauthorized deepfakes in political advertising, and requires healthcare providers to notify patients when they are interacting with an AI and not a human.

Healthcare provider networks, also known as HMOs, are barred in California from using AI systems instead of doctors to decide medical necessity.

House Republicans said in a hearing Tuesday that the measure was necessary to help the federal government in implementing AI, for which the package allocates $500 million.

“It’s nonsensical to do that if we’re going to allow 1,000 different pending bills in state legislatures across the country to become law,” said Jay Obernolte, a Republican from California who represents part of Silicon Valley, including Mountain View where Google is based.

“It would be impossible for any agency that operates in all the states to be able to comply with those regulations,” he said.

Google has called the proposed moratorium “an important first step to both protect national security and ensure continued American AI leadership.”

That position will be tested if the measure makes it to the Senate. It will need to clear the budget reconciliation process, which is supposed to be used only for budget-related legislation.

(Reporting by Jody Godoy in New York; Editing by Aurora Ellis)