Newsom vetoes US's first bill aimed at regulating large-scale artificial intelligence

Published On Sep 29, 2024, 4:35 PM

California Governor Gavin Newsom vetoed a significant bill aimed at regulating artificial intelligence, the 'Safe and Secure Innovation for Frontier Artificial Intelligence Models Act'. This bill would have mandated safety measures, including a 'kill switch' for AI models, especially for those costing over $100 million to train. Newsom criticized the bill for being overly stringent and not tailored to the risk levels of AI deployments. He expressed commitment to developing a more balanced regulatory framework in collaboration with AI experts. The decision has sparked a mix of support and opposition among tech companies and industry leaders, highlighting the ongoing debate about responsible AI regulation.

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Stock Forecasts

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Positive

The veto of the AI regulation bill may temporarily relieve pressures on tech companies, fostering innovation without immediate constraints. However, ongoing dialogue and potential future regulations could still impact the industry. Companies focused on AI technologies may see a rebound in demand given the lack of current stringent regulations, but they should remain prepared for eventual regulatory changes.

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Negative

Despite news of the veto, companies that were advocating for regulation, such as Anthropic, may remain under pressure to demonstrate responsible AI development. This could create volatility as their strategies for compliance and innovation adapt to a changing landscape of public opinion and regulatory scrutiny.

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