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The bill increases regulatory requirements for machine learning systems in California.

May 24, 2024 In a Tuesday press release, Haltia AI, an artificial intelligence startup based in Dubai, warned leaders in machine learning that Californias new AI bill will cripple innovation with overly burdensome regulations.

Haltia said that the bill throws a wrench into the growth of AI startups with its unrealistic requirements and stifling compliance costs.

The legislation, titled the Understanding the Safe and Secure Innovation for Frontier Artificial Intelligence Act, was introduced in February and passed the California State Senate on Tuesday. The act mandates that developers of AI tools comply with various safety requirements and report any safety concerns.

AI systems are defined by the act as machine-based systems that can make predictions, recommendations, decisions, and formulate options. Safety tests include ensuring that an AI model does not have the capability to enable harms, such as creation of chemical and biological weapons or cyberattacks on critical infrastructure. Third party testers will be required to determine the safety of these systems.

Haltia said that on the surface, the act aims for responsible AI development. However, its implementation creates a labyrinth of red tape that disproportionately impacts startups. Because the bill requires ongoing annual reviews, Haltia argues that it adds significant technical and financial burdens.

Arto Bendiken, co-founder and CTO at Haltia, said that the act is a prime example of how well-intentioned regulations can morph into a bureaucratic nightmare. He added that the financial penalties for non-compliance only exacerbate the issue, potentially deterring groundbreaking ideas before they even take flight.

Haltia called for other AI startups to follow its lead and move operations to the United Arab Emirates where its thriving ecosystem, coupled with its commitment to the future of AI, makes it the ideal launchpad for the next generation of groundbreaking AI technologies in the Silicon Valley of the East.

In 2023, California Governor Gavin Newson signed an executive order that announced new directives aimed at understanding the risks of machine learning technologies in order to ensure equitable outcomes when used and to prepare the states workforce for its use.

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