Mr Donald Trump who has already struck a few ups and downs in his policy drive now has entered the AI regulation domain.
What is termed as a Draft Big Beautiful Bill (OBBB) bans all state-level AI regulations for the next 10 years.
There is an expectation that this would have a “Freedom first” approach to US-AI laws (Refer here). Given the fickleness of Mr Donald Trump, I donot think this would turn out to be an “freedom to innovate”. It could only be a different approach to AI regulation in USA.
OBBB does not mean that AI will not be regulated in USA. It only means that the US Federal regulations will be the only regulatory agency for AI. This is an attempt to Centralize the AI regulation in USA.
OBBB also does not mean that Indian businesses can use any AI algorithm without responsibility. Any user of AI in India will have the vicarious obligation under ITA 2000 and DPDPA 2023 and will have to absorb the Risks. If the Risk is “Unknown” because US sheds the ethical AI development model, the users will be considered as “Significant Data Fiduciaries” and “High Risk Intermediaries” and could have more liability under law than what they may recognize.
Let us remember that Indian companies are regulated by Indian laws..not US or EU laws when it comes to operating on Indian data. Hence the responsibility for ITA 2000 and DPDPA Compliance remains paramount and if unregulated AI is dumped on India, Indian user organizations have to be more careful than they were before to ensure compliance of Indian laws. Taking refuge that US does not need “Disclosure” or “Transparency” or “Accountability” does not help Indian “Intermediaries” or “Data Fiduciaries” with compliance of Indian laws.
Since OBBB would directly affect the federal nature of the US , it could face a challenge in the Courts but beyond this internal clash between Republic states and the Democrat states, this is unlikely to have any impact on the global scenario as some predict.
US did have the confusion of 50 states each having different regulations in the Privacy area and if there were 50 AI regulations also, it would have been a problem to the world. This unification of regulations is therefore welcome since the world does not see the State of California as different from the State of New York.
Hopefully there would be more such unification of laws related to “Internet Economy”.
Naavi
