AI Legislative Update

Congressional legislation to regulate artificial intelligence (“AI”) and AI companies is in the early formative stages. Just about the only thing that is certain at this point is that federal regulation in the United States is coming.

Congressional legislation to regulate artificial intelligence (“AI”) and AI companies is in the early formative stages. Just about the only thing that is certain at this point is that federal regulation in the United States is coming.

In August, 2023, Senators Richard Blumenthal (D-CT) and Josh Hawley (R-MO) introduced a Bipartisan Framework for U.S. AI Act. The Framework sets out five bullet points identifying Congressional legislative objectives:

  • Establish a federal regulatory regime implemented through licensing AI companies, to include requirements that AI companies provide information about their AI models and maintain “risk management, pre-deployment testing, data governance, and adverse incident reporting programs.”
  • Ensure accountability for harms through both administrative enforcement and private rights of action, where “harms” include private or civil right violations. The Framework proposes making Section 230 of the Communications Decency Act inapplicable to these kinds of actions. (Second 230 is the provision that generally grants immunity to Facebook, Google and other online service providers for user-provided content.) The Framework identifies the harms about which it is most concerned as “explicit deepfake imagery of real people, production of child sexual abuse material from generative A.I. and election interference.” Noticeably absent is any mention of harms caused by copyright infringement.
  • Restrict the sharing of AI technology with Russia, China or other “adversary nations.”
  • Promote transparency: The Framework would require AI companies to disclose information about the limitations, accuracy and safety of their AI models to users; would give consumers a right to notice when they are interacting with an AI system; would require providers to watermark or otherwise disclose AI-generated deepfakes; and would establish a public database of AI-related “adverse incidents” and harm-causing failures.
  • Protect consumers and kids. “Consumer should have control over how their personal data is used in A.I. systems and strict limits should be imposed on generative A.I. involving kids.”

The Framework does not address copyright infringement, whether of the input or the output variety.

The Senate Judiciary Committee Subcommittee on Privacy, Technology, and the Law held a hearing on September 12, 2023. Witnesses called to testify generally approved of the Framework as a starting point.

The Senate Commerce, Science, and Transportation Subcommittee on Consumer Protection, Product Safety and Data Security also held a hearing on September 12, called The Need for Transparency in Artificial Intelligence. One of the witnesses, Dr. Ramayya Krishnan, Carnegie Mellon University, did raise a concern about the use of copyrighted material by AI systems and the economic harm it causes for creators.

On September 13, 2023, Sen. Chuck Schumer (D-NY) held an “AI Roundtable.” Invited attendees present at the closed-door session included Bill Gates (Microsoft), Elon Musk (xAI, Neuralink, etc.) Sundar Pichai (Google), Charlie Rivkin (MPA), and Mark Zuckerberg (Meta). Gates, whose Microsoft company, like those headed by some of the other invitees, has been investing heavily in generative-AI development, touted the claim that AI could target world hunger.

Meanwhile, Dana Rao, Adobe’s Chief Trust Officer, penned a proposal that Congress establish a federal anti-impersonation right to address the economic harms generative-AI causes when it impersonates the style or likeness of an author or artist. The proposed law would be called the Federal Anti-Impersonation Right Act, or “FAIR Act,” for short. The proposal would provide for the recovery of statutory damages by artists who are unable to prove actual economic damages.

Another AI lawsuit against Microsoft and OpenAI

Last June, Microsoft, OpenAI and others were hit with a class action lawsuit involving their AI data-scraping technologies. On Tuesday (September 5, 2023) another class action lawsuit was filed against them. The gravamen of both of these complaints is that these companies allegedly trained their AI technologies using personal information from millions of users, in violation of federal and state privacy statutes and other laws.

Among the laws alleged to have been violated are the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Invasion of Privacy Act, California’s unfair competition law, Illinois’s Biometric Information Privacy Act, and the Illinois Consumer Fraud and Deceptive Business Practices Act. The lawsuits also allege a variety of common law claims, including negligence, invasion of privacy, conversion, unjust enrichment, breach of the duty to warn, and such.

This is just the most recent lawsuit in a growing body of claims against big AI. Many involve allegations of copyright infringement, but privacy is a growing concern. This particular suit is asking for an award of monetary damages and an order that would require the companies to implement safeguards for the protection of private data.

Microsoft reportedly has invested billions of dollars in OpenAI and its app, ChatGPT.

The case is A.T. v. OpenAI LP, U.S. District Court for the Northern District of California, No. 3:23-cv-04557 (September 5, 2023).

Is Microsoft “too big to fail” in court? We shall see.

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