If 2023 wasn’t busy enough for AI regulation, don’t worry. Within the first 10 days of 2024, many of the largest states in the United States have already pushed forward a range of legislation.
These legislations build on the December agreement around the EU AI Act, established as a global benchmark, and the enforcement of groundbreaking laws like New York City's Local Law 144 and Colorado’s SB-169, which have underscored the urgency for robust AI governance and risk tracking in AI.
Though these bills have just now been set in motion, they would constitute significant changes to the way AI is regulated in many of the largest economies within the US. Sure, there is a significant chance these bills will change as they progress through their respective legislatures. With that said, they provide a solid signal towards how many of the US’s largest states plan to regulate AI in the future and spell out some steps that organizations can take today to be prepared.
Let’s look at how US regulations are proceeding at the start of 2024, as well as some of the specifics put before legislatures in New York, California, and Florida.
In the US, the drive for AI regulation is increasingly evident at the state level, signaling a significant shift in how AI is governed:
• New York's Legislative Efforts: The state is advancing with laws like the AEDT law A00567, and Senate versions of assembly bills A08158 and A08098, showcasing a proactive stance in AI governance.
• California's AI Bills: California has introduced five new AI bills, focusing on:
• Florida's Transparency Focus: Florida's proposed laws emphasize transparency in AI, with five initiatives covering:
Combined, these state-level actions reflect requirements that move the US much closer to alignment with the EU's comprehensive approach to AI regulation. In many ways, however, the diversity of the state-level regulatory landscape makes it harder for large organizations to stay on top of all requirements. The key difference we’re seeing can be spelled out in the difference between vertical and horizontal AI regulation.
While the EU has adopted a horizontal approach to AI legislation, addressing multiple use cases under a unified framework, the US has predominantly pursued a vertical strategy:
• Vertical Legislation in the US: This approach targets specific AI applications and sectors. Examples include:
• Horizontal Legislation in the EU: The EU AI Act is a prime example of horizontal legislation, setting broad standards applicable across various AI applications and industries. Additional horizontal legislation active or pending in the EU includes:
This divergence in approaches between the US and EU presents unique challenges and opportunities for businesses and policymakers:
As we delve into the specifics of state-level AI regulation, California, New York, and Florida emerge as frontrunners, each introducing groundbreaking legislation that sets a precedent for other states to follow.
California, home to more AI companies than anywhere in the world, and the 5th largest economy in the world is particularly noteworthy in its potential regulation. While past AI bills in the state have failed, the continued push to vote on regulation portends likely future regulation.
Their legislative efforts are not just about regulating AI but also about fostering an environment where innovation thrives alongside ethical considerations.
The primary focus areas of California’s proposed 2024 bills include generative AI and the public sector.
With this said, California's approach to AI regulation is multifaceted, balancing the need for innovation with ethical oversight.
Another significant initiative, the California Artificial Intelligence Research Hub, represents a collaborative effort. It aims to bring together government entities, academic institutions, and the private sector, focusing on developing AI that upholds privacy and security while addressing societal risks and potential harms.
Florida's legislative proposals, center around transparency but in a wide range of AI application types including AI in education, public AI use, AI in social media, the creation of a research council, and a bill focusing on autonomous vehicles.
Clearly inspired by the Colorado insurance law, New York introduced A08369 on December 13, 2023 with an almost identical text to the Colorado law, except swapping out “commissioner of insurance” for “superintendent [of financial services]”, for example.
The law restricts insurers’ use of external consumer data correlated to protected attributes such as ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression. External data that the legislation would govern would include:
The actual requirements of the law are still being developed. In this case, it would be the role of the superintendent to outline specifics about many areas of the law as they apply to different types of insurance.
Additionally, it should be noted that the regulation would not apply to title insurance, bonds executed by qualified surety, or insurers that issue commercial policies unless they issue business owners’ policies or commercial general liability policies that have annual premiums of less than $10,000.
For businesses, the importance of Florida, California, and New York can’t be understated. The emergence of potential (and differing) bills in all three creates a scenario in which large organizations will be required to comply with each and all of the states’ stipulations.
Rather than silo initiatives to respond to every applicable regulation, organizations should look for similarities in requirements and start laying the groundwork for standardization from design through maintenance of AI systems.
Due to the application-specific nature of this vertical legislation, organizations will also need a clear picture of what applications they’re using. Robust inventorying and registration of AI systems and dependencies helps to plot risk vectors.
Many of these emerging laws also emphasize cross-sector collaboration. Policymakers are seeking to encourage partnerships and create frameworks that support an up-to-date evolution of AI regulation. This offers an opportunity for companies being monitored to present their take on the implementation of laws.
Key Takeaways
For Businesses:
Is your organization at the forefront of integrating AI technologies, especially in sectors like insurance, healthcare, or public administration? With the regulatory landscape rapidly evolving, it's crucial to stay ahead of the curve.
Lawmakers and regulators, from California, to New York, to Florida, are intensifying their focus on AI regulation. This trend is not just confined to specific industries but is becoming a widespread imperative.
At Holistic AI, we understand the complexities and challenges of complying with these diverse and ever-changing regulations. Our Governance, Risk, and Compliance Platform, coupled with a suite of innovative solutions, is designed to guide and support organizations like yours.
Trusted by global companies, our platform ensures that your AI systems are not only compliant but also optimized for maximum efficacy, adoption, and trust. Don't let regulatory challenges hinder your AI journey.
Take the proactive step today. Schedule a call with one of our AI policy experts and empower your organization to navigate the AI regulatory landscape with confidence and foresight. Let Holistic AI be your partner in achieving compliant, efficient, and trusted AI systems.
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