California AI Safety Bill Gets Legislature’s Approval

California lawmakers passed an artificial intelligence safety bill despite industry opposition.

The bill needs one more process vote before it heads to Gov. Gavin Newsome, who has until the end of September to either sign the legislation into law or veto it, Reuters reported Wednesday (Aug. 28).

Senate Bill 1047 requires safety testing by AI companies with models that cost more than $100 million to develop or those needing a defined amount of computing power. In addition, AI developers in California must establish ways to shut down their models if something goes wrong.

The bill, crafted by State Sen. Scott Wiener, aims to lessen catastrophic risks associated with AI. Tech companies such as OpenAI have criticized the legislation, arguing it could cause AI firms to leave the state and hamstring innovation.

One exception is Elon Musk, head of Tesla and social platform X. Earlier this week, he voiced support for the bill in a post on X.

“For over 20 years, I have been an advocate for AI regulation, just as we regulate any product/technology that is a potential risk to the public,” Musk wrote, adding the decision was a “tough call” that would likely upset some parties.

This is a tough call and will make some people upset, but, all things considered, I think California should probably pass the SB 1047 AI safety bill.

For over 20 years, I have been an advocate for AI regulation, just as we regulate any product/technology that is a potential risk…

— Elon Musk (@elonmusk) August 26, 2024

Industry experts say the bill’s implications could be significant for eCommerce. Aditi Godbole, senior data scientist at software company SAP, told PYMNTS that more than 63% of eCommerce platforms use AI models for recommendation engines, dynamic pricing, real-time personalization search, smart collections and conversational building tools.

“Many parts of the bill are complex, not well-defined, lack granularity, and are unsuitable for smaller players and startups in the eCommerce space,” she said.

Among her concerns is the introduction of mandatory AI safety testing, which she said has the potential to hinder innovations for eCommerce functions like personalized shopping.

Meanwhile, other states are exploring their own AI legislation. This month, the Texas Senate Business and Commerce Committee had an almost four-hour hearing to collect testimony on AI’s far-reaching implications, from improved efficiency in state agencies to concerns about misinformation, biased decision-making and consumer privacy violations.

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