The battle between California and the White House intensified after President Trump signed an executive order blocking state laws governing artificial intelligence.
The president's attempt to take control of regulation of the technology behind ChatGPT through an executive order on Thursday was greeted with applause by his allies in Silicon Valley, who warned that layers of tough rules and regulations were holding them back and could leave the U.S. behind in the battle to maximize the benefits of AI.
The order directs the attorney general to create a task force to challenge certain state artificial intelligence laws. The order says states with “burdensome artificial intelligence laws” could lose federal funding for the broadband rollout program and other grants.
The Trump administration said the order would help US companies win the AI race against countries like China by eliminating “burdensome regulation.” He's also pushing for a “minimally burdensome” national standard rather than a patchwork of laws across the 50 states that the administration says makes compliance difficult, especially for startups.
“You have to have a central source of approval when they need approval. So everything has to come to one source. They can't go to California, New York and other places,” Trump told reporters in the Oval Office on Thursday.
California Governor Gavin Newsom opposed the order, saying it “promotes corruption rather than innovation.”
“They are running a scam. And every day they are pushing the boundaries to see how far they can go,” Newsom said in a statement. “California is working on behalf of Americans to build the strongest innovation economy in the country while implementing common sense policies and paving the way forward.”
The dueling remarks from Newsom and Trump underscore how the tech industry's influence on regulation has heightened tensions between the federal government and state lawmakers as they try to impose more barriers around AI.
While AI chatbots can help people quickly find answers to questions and generate text, code and images, the growing role technology plays in people's daily lives is also raising greater concerns about job loss, equality and harm to mental health.
This order will severely impact California, home to some of the world's largest technology companies such as OpenAI, Google, Nvidia and Meta. It also jeopardizes $1.8 billion in federal funding California received to expand high-speed internet across the state.
Some analysts say Trump's order is a victory for tech giants, which have pledged to invest trillions of dollars in data center construction and research and development.
“We believe that over time, more organizations are expected to follow the AI roadmap through strategic deployment, but this executive order removes more questions about future AI developments and removes significant redundancies moving forward,” Wedbush analyst Dan Ives said in a statement.
Facing lobbying from tech companies, Newsom vetoed some artificial intelligence laws while signing others into law this year.
One new law requires platforms to display labels to minors warning about the mental health risks of social media. Another aims to make AI developers more transparent about security risks and offers stronger protections for whistleblowers.
He also signed a bill that would require chatbot operators to have procedures in place to prevent the creation of content about suicide or self-harm, although child safety groups withdrew support for the legislation because they said the tech industry had successfully pushed changes that weakened protections.
States and consumer advocacy groups are expected to legally challenge Trump's order.
“Trump is not our king, and he cannot simply wave his pen to unilaterally invalidate a state law,” state Sen. Steve Padilla (D-Chula Vista), who introduced the chatbot safety legislation signed by Newsom, said in a statement.
In addition to California, three other states—Colorado, Texas, and Utah—have passed laws according to the International Association, which sets some rules for AI in the private sector. privacy specialists. These laws include limiting the collection of certain personal information and requiring more transparency from companies.
More ambitious government proposals to regulate AI would require private companies to be transparent and assess possible risks of discrimination within their AI programs. Many of them have been adjusted AI parts: ban the use of deepfakes in elections and create porn without consentfor example, or introducing regulations regarding government use of AI.
The order drew both praise and criticism from the tech industry.
Collin McCune, head of government affairs at venture capital firm Andreessen Horowitz, said on social media site X that the order is an “incredibly important first step.”
“However, a vacuum for federal AI legislation remains,” he wrote. “Congress needs to come together to create a clear set of rules that will protect the millions of Americans who use AI and the developers of small technologies pushing it forward.”
Omidyar Network Chief Executive Mike Kubzanski said in a statement that he recognizes the risks associated with poorly written rules, but the solution is not to flout state and local laws.
“Americans are rightly concerned about the impact of artificial intelligence on children, jobs, and the costs that the rapid expansion of data centers brings to consumers and communities,” he said. “Ignoring these issues by imposing a blanket moratorium is a denial of what elected officials owe to their constituents, and that is why we strongly oppose the administration’s recent executive actions.”
Investors appeared unimpressed by the possible boost the sector could receive from the White House.
The stock market fell sharply on Friday, led by AI stocks.
Bloomberg and The Associated Press contributed to this report.
