Some tech giants see California AI bill as threat to innovation

Published On Aug 26, 2024, 5:42 PM

California is considering a pioneering AI safety bill, SB 1047, that would impose strict safety testing and accountability requirements on companies developing large AI models. This includes mandatory safety evaluations and third-party audits for firms spending over $100 million on AI, as well as a kill switch feature for AI technologies. The bill has sparked debate in Silicon Valley, with some, including Elon Musk, supporting it, while others argue it could stifle innovation and harm smaller AI developers. The bill is poised for a vote in the State Assembly and could become the first major regulation of its kind in the U.S.

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Stock Forecasts

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Positive

If SB 1047 is passed, we could see volatility in AI stocks as companies adjust to new regulations. While larger entities like Google and Meta may experience temporary setbacks, companies specializing in compliance solutions or developing necessary technologies (like auditing practices) may thrive.

GOOGView GOOG chart on TradingView

Negative

Opposition from prominent figures in the AI industry raises concerns over potential impacts on innovation. Stocks of major players in AI could take a hit if the regulations are perceived as limiting their operational flexibility.

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