Businesses prepare for uncertain future with AI regulation

The growing risk of AI regulation is becoming a key concern for US companies, with 27% of Fortune 500 firms citing it in their recent reports. The development of AI rules is seen as a potential threat to innovation and business practices, especially in light of state-level initiatives such as California’s SB 1047. Companies fear that such regulations could hinder AI model development and sharing, with hundreds of similar bills being proposed nationwide.

Businesses like Moody’s have voiced concerns over how AI regulation could increase compliance burdens, while others like Johnson & Johnson are mindful of global efforts, including the EU’s AI Act. Despite the potential for greater oversight, companies like Booking Holdings have acknowledged the benefits of regulating AI models to prevent biases and other risks. The White House’s Executive Order on AI and the rise of state legislation point to a future of tighter regulation.

To manage these risks, some corporations are taking matters into their own hands by implementing internal AI guidelines ahead of new laws. S&P Global has established its own AI policies to anticipate upcoming regulations but remains concerned that new laws could impede competition in the AI space. On the other hand, companies such as Nasdaq have already begun working with regulators on AI-enabled solutions, demonstrating how businesses are navigating the complex regulatory landscape.

Despite these challenges, companies are pressing ahead with AI initiatives as they seek to stay competitive. Despite regulatory uncertainty and varying laws from state to state, businesses are unwilling to slow their AI development, knowing their rivals are likely to push forward. Industry leaders believe thoughtful regulation could eventually benefit AI adoption if it supports responsible and innovative practices.