Pumping the Brakes on California's AI Regulation Efforts
California Governor Gavin Newsom vetoed Senate Bill 1047, which the California legislature had passed to address the ethical implications and potential risks associated with AI by mandating that companies developing AI systems adhere to specific guidelines to ensure transparency, accountability, and fairness. Additionally, the law would have required companies to conduct regular audits and assessments to mitigate any biases or harmful impacts their AI systems might have on society. Governor Newsom provided two concerns: (1) the legislation was too stringent and could burden the state’s leading AI companies, and (2) the bill focused on large AI models, while smaller upstarts could be just as problematic. With respect to the first point, Governor Newsom’s concerns are not unwarranted as Meta recently announced it will not release its multimodal Llama AI model in the EU because of regulatory concerns.

California's regulatory ambitions also faced a setback when a federal judge blocked a new law aimed at curbing the spread of AI-generated deepfakes. The law, which was intended to combat malicious deepfake videos and images, was challenged on the grounds that it infringed upon First Amendment rights. The judge ruled that the law was overly broad and could potentially stifle free speech. This ruling underscores the ongoing tension between regulating emerging technologies and protecting constitutional rights. As California continues to navigate these challenges, we will continue to watch this debate on how best to manage the rapid advancements in AI technology.

The U.S. Copyright Office's Evolving Stance on AI-Generated Works 
The U.S. Copyright Office has recently shown a slightly more flexible approach toward AI-generated content, reflecting the growing influence of artificial intelligence in creative fields. Historically, the Office only granted copyrights to works created by human authors. However, as AI technology advances, the lines between human and machine creativity blur. In a recent decision from the U.S. Copyright Office, the Office granted a registration to an individual named Elisa Shupe for her novel AI Machinations: Tangled Webs and Typed Words, which she created by entering custom commands into ChatGPT and editing the text outputs. Following an initial refusal and an appeal earlier this year, the protections now granted by the registration protect Shupe for the “selection, coordination, and arrangement of text generated by artificial intelligence” but do not extend to the text itself.  This shift, although narrow, could be impactful for artists and creators who increasingly use AI tools to enhance their work, potentially opening new avenues for copyright protection and recognition of AI-assisted creativity. Despite this evolving perspective, the debate on copyright protections for AI-generated works is far from over. Most recently, artist Jason M. Allen filed a lawsuit after the U.S. Copyright Office rejected his application for a copyright on an AI-generated image, which Allen says he created through hours of creativity, using hundreds of prompts and iterations. Allen's case highlights the ongoing tension between traditional copyright laws and the innovative capabilities of AI. As courts and lawmakers grapple with these issues, the outcome of such cases will likely shape the future of copyright law, determining how AI-generated works are protected and valued.
 
Quick Links
For additional insights on AI, check out Baker Botts’ thought leadership in this area:

1. AI Counsel Code Podcast: Maggie Welsh and John Lawrence sit down to discuss the implications of artificial intelligence in SEC disclosures. They explore how AI can be utilized to enhance transparency and compliance in financial reporting and the potential regulatory challenges that may arise.
2. Capital Factory Podcast: Rich Harper discusses the legal landscape of AI on the Capital Factory Podcast, which features discussions with entrepreneurs, investors, and innovators.
3. DOJ AI Compliance Guidance: Brendan Quigley, Maggie, and Rich discuss the latest updates from the Department of Justice regarding AI-related compliance guidance. The article highlights
   the key points of the new guidance, focusing on how organizations can ensure their AI systems comply with legal and ethical standards.

For additional information on our Artificial Intelligence practice, experience and team, please visit our page here. 

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