OpenAI warns California’s AI bill threatens US innovation
OpenAI has added its voice to the growing chorus of tech leaders and politicians opposing a controversial AI safety bill in California. The company argues that the legislation, SB 1047, would stifle innovation and that regulation should be handled at a federal level.
In a letter sent to California State Senator Scott Wiener’s office, OpenAI expressed concerns that the bill could have “broad and significant” implications for US competitiveness and national security. The company argued that SB 1047 would threaten California’s position as a global leader in AI, prompting talent to seek “greater opportunity elsewhere.”
Introduced by Senator Wiener, the bill aims to enact “common sense safety standards” for companies developing large AI models exceeding specific size and cost thresholds. These standards would require companies to implement shut-down mechanisms, take “reasonable care” to prevent catastrophic outcomes, and submit compliance statements to the California attorney general. Failure to comply could result in lawsuits and civil penalties.
Lieutenant General John (Jack) Shanahan, who served in the US Air Force and was the inaugural director of the US Department of Defense’s Joint Artificial Intelligence Center (JAIC), believes the bill “thoughtfully navigates the serious risks that AI poses to both civil society and national security” and provides “pragmatic solutions”.
Hon. Andrew C. Weber – former Assistant Secretary of Defense for Nuclear, Chemical, and Biological Defense Programs – echoed the national security concerns.
“The theft of a powerful AI system from a leading lab by our adversaries would impose considerable risks on us all,” said Weber. “Developers of the most advanced AI systems need to take significant cybersecurity precautions given the potential risks involved in their work. I’m glad to see that SB 1047 helps establish the necessary protective measures.”
SB 1047 has sparked fierce opposition from major tech companies, startups, and venture capitalists who argue that it overreaches for a nascent technology, potentially stifling innovation and driving businesses from the state. These concerns are echoed by OpenAI, with sources revealing that the company has paused plans to expand its San Francisco offices due to the uncertain regulatory landscape.
Senator Wiener defended the bill, stating that OpenAI’s letter fails to “criticise a single provision.” He dismissed concerns about talent exodus as “nonsensical,” stating that the law would apply to any company conducting business in California, regardless of their physical location. Wiener highlighted the bill’s “highly reasonable” requirement for large AI labs to test their models for catastrophic safety risks, a practice many have already committed to.
Critics, however, counter that mandating the submission of model details to the government will hinder innovation. They also fear that the threat of lawsuits will deter smaller, open-source developers from establishing startups. In response to the backlash, Senator Wiener recently amended the bill to eliminate criminal liability for non-compliant companies, safeguard smaller developers, and remove the proposed “Frontier Model Division.”
OpenAI maintains that a clear federal framework, rather than state-level regulation, is essential for preserving public safety while maintaining US competitiveness against rivals like China. The company highlighted the suitability of federal agencies, such as the White House Office of Science and Technology Policy and the Department of Commerce, to govern AI risks.
Senator Wiener acknowledged the ideal of congressional action but expressed scepticism about its likelihood. He drew parallels with California’s data privacy law, passed in the absence of federal action, suggesting that inaction from Congress shouldn’t preclude California from taking a leading role.
The California state assembly is set to vote on SB 1047 this month. If passed, the bill will land on the desk of Governor Gavin Newsom, whose stance on the legislation remains unclear. However, Newsom has publicly recognised the need to balance AI innovation with risk mitigation.
(Photo by Solen Feyissa)
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