AI Regulation: New York and California Take the Lead

The rapid advancement of artificial intelligence (AI) has spurred a wave of legislative action across the United States—with New York and California arguably emerging as frontrunners. Both states enacted laws in 2024 aimed at regulating AI, but their approaches differ significantly, reflecting distinct priorities and concerns.

Although California’s broader regulatory efforts have focused on transparency and political content, New York has taken a narrower aim, zeroing in on public agency use of AI. Despite their differences, both New York and California’s legislation share a common goal: to harness the benefits of AI while mitigating its potential harms. These initiatives from California and New York set the stage for other states to follow suit.

California, a long-time hub for technological innovation, has adopted a comprehensive approach, passing a series of bills addressing various aspects of AI. One key focus is transparency. The California AI Transparency Act that became law in September 2024 mandates that businesses with large-scale generative AI systems disclose their use to the public and provide tools for users to identify AI-generated content. This act aims to combat the spread of misinformation and deep fakes, particularly concerning elections and political discourse. Further emphasizing ethical considerations, California also passed AB 2839, requiring political advertisements to clearly label any AI-generated content. This measure seeks to preserve the integrity of elections and ensure voters are not misled by synthetic media, though a federal judge has temporarily blocked the legislation due to a First Amendment challenge.

New York, on the other hand, has taken a more targeted approach, prioritizing the impact of AI on employment and government services. The “LOADinG Act” (Lawful Obligations and Due Diligence in Government Act) imposes strict requirements on state agencies using automated decision systems (ADS). These agencies must conduct impact assessments, ensure due process for individuals affected by ADS decisions, and provide transparency about how these systems function. This legislation reflects a growing concern about the potential for AI bias and discrimination, particularly in areas like criminal justice and social services.

These laws represent important steps toward a regulatory framework for AI in the United States, setting a precedent for other states and potential federal policy. It is important to note, however, that these laws also pose challenges. Critics argue that California’s transparency requirements may be difficult to enforce and could stifle innovation. Concerns also abound about the potential for over-regulation and the need to balance consumer protection with the First Amendment rights of businesses, a tension that will play out in the courts as the fate of AB 2839 is decided. In New York, the LOADinG Act’s focus on government agencies leaves a gap in regulating private sector use of AI, raising questions about potential biases in areas like hiring and lending.

New York and California’s AI legislation seek to address the ethical and societal implications of this transformative technology. Although their approaches differ, both states are paving the way for a future where AI is used responsibly and transparently, and their action may prompt other legislatures to adopt their own regulations. As AI technology continues to evolve, ongoing dialogue and collaboration between lawmakers, technologists, and the public will be essential to ensure that AI serves humanity in a responsible and ethical manner.