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Recently, U.S. Senator Ted Cruz proposed a new legislation called the "SANDBOX Act." This bill aims to provide AI companies with a "regulatory sandbox" allowing them to experiment with fewer federal regulations.
Image source note: The image is AI-generated, and the image licensing service is Midjourney.
According to the bill, AI companies can apply to modify or exempt any "blocking regulation" to more easily test and deploy products or services that include or use at least one AI system. In exchange, companies need to disclose their plans to mitigate consumer safety and financial risks to regulatory authorities.
The bill stipulates that the exemption period is two years, which can be extended up to ten years. This proposal is similar to a previous failed initiative that aimed to suspend all state-level AI regulations for ten years. The proposal was rejected in the Senate in July. The relevant federal agencies, such as the Federal Trade Commission (FTC), which is responsible for protecting children's online privacy, will grant exemptions. If the relevant agency does not respond within 90 days, the exemption will be automatically granted. If the application is rejected, companies can appeal to the White House Office of Science and Technology Policy (OSTP), which will oversee the regulatory sandbox project and has the authority to overturn the rejection decision. Each year, Congress will receive a report on the number of exemptions or modifications to federal rules.
The technology accountability organization "The Tech Oversight Project" expressed concerns about this bill, calling it a "sweet deal" for "big tech CEOs," and companies that donated to Donald Trump might have different rules. Additionally, the consumer rights organization "Citizens Public Affairs" warned that the bill would allow Silicon Valley to adopt an attitude of "pushing forward quickly and breaking everything" in terms of law and regulation. Both organizations are concerned about the power given to OSTP to overturn decisions made by federal agencies, as many of these agencies have already lost effectiveness due to dismantling.
Notably, Trump had previously stated support for creating a regulatory sandbox for AI companies in his AI action plan released in July. Furthermore, Trump's plan also includes indirectly promoting the establishment of this regulatory sandbox by revoking funding support for states implementing AI regulations. Texas, where Cruz is based, passed a similar AI law in June this year, but the sandbox period in that bill was limited to 36 months.
Key Points:
✅ Senator Ted Cruz's "SANDBOX Act" allows AI companies to test products with less regulation.
🔍 The bill allows companies to apply for exemptions, with the longest exemption period being 10 years.
⚖️ Regulatory authority belongs to relevant federal agencies, and if the application is rejected, it can be appealed to the White House Office of Science and Technology Policy.