OpenAI opposes California AI bill as lawmakers prepare to vote

OpenAI has expressed opposition to California’s proposed bill regulating AI development and deployment as lawmakers prepare for an upcoming vote.

In a letter addressed to California State Senator Scott Wiener, the AI startup argued that the bill would stifle innovation in the sector and suggested that such regulation should be handled at the federal rather than state level, according to a Bloomberg report.

But in response, Wiener said that the OpenAI letter doesn’t criticize a single provision of the bill and that the company appears to acknowledge the bill’s specific core provisions.

“Instead of criticizing what the bill actually does, OpenAI argues this issue should be left to Congress,” Wiener said in a statement. “As I’ve stated repeatedly, I agree that ideally, Congress would handle this. However, Congress has not done so, and we are skeptical Congress will do so.”

“Under OpenAI’s argument about Congress, California never would have passed its data privacy law, and given Congress’s lack of action, Californians would have no protection whatsoever for their data,” Wiener added.  

The bill, SB 1047, seeks to implement safety regulations for large-scale AI models that surpass certain size and cost benchmarks. Passed by the state Senate in May, the legislation mandates AI firms to adopt measures ensuring their technologies do not facilitate severe risks, including the creation of bioweapons capable of widespread casualties or causing financial losses exceeding $500 million.

A controversial bill

Other technology firms, including Meta and Alphabet, and trade associations including the AI Alliance have also reportedly opposed the bill.

Charlie Dai, VP and principal analyst at Forrester, noted that although AI governance on security, privacy, and regulatory compliance is crucial, the new bill could create unnecessary business uncertainty and raise operational costs for most AI companies.

This may slow the pace of innovation and harm the overall open source ecosystem surrounding AI.

“AI firms need to consider a range of options to mitigate the effects, such as engaging with lawmakers collaboratively to shape the bill in a way that balances safety with innovation, making more investment in regulatory compliance, and expanding or relocating to states with more flexible policies,” Dai added.

In the letter, OpenAI warned that the proposed legislation could significantly and adversely impact US competitiveness in AI and national security.

Wiener responded that, far from undermining national security, SB 1047’s requirements for AI companies to thoroughly test their products for the ability to cause catastrophic harm can only strengthen national security.

Not limited to California-based companies

OpenAI has also argued that the legislation could drive companies out of California, but Senator Wiener countered, noting the bill would affect any company doing business in the state, regardless of where they are based.

“This tired argument — which the tech industry also made when California passed its data privacy law, with that fear never materializing — makes no sense given that SB 1047 is not limited to companies headquartered in California,” Wiener said in the statement. “Rather, the bill applies to companies doing business in California. As a result, locating outside of California does not avoid compliance with the bill.” 

Efforts have been made throughout the year in collaboration with open-source advocates, Anthropic, and others to refine and improve the bill, according to Wiener. He added that SB 1047 is well-calibrated to address foreseeable AI risks and deserves to be enacted.