[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
AI REGULATION AND THE FUTURE OF U.S.
LEADERSHIP
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
MAY 21, 2025
__________
Serial No. 119-21
Published for the use of the Committee on Energy and Commerce
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-631 PDF WASHINGTON : 2026
-----------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
BRETT GUTHRIE, Kentucky
Chairman
ROBERT E. LATTA, Ohio FRANK PALLONE, Jr., New Jersey
H. MORGAN GRIFFITH, Virginia Ranking Member
GUS M. BILIRAKIS, Florida DIANA DeGETTE, Colorado
RICHARD HUDSON, North Carolina JAN SCHAKOWSKY, Illinois
EARL L. ``BUDDY'' CARTER, Georgia DORIS O. MATSUI, California
GARY J. PALMER, Alabama KATHY CASTOR, Florida
NEAL P. DUNN, Florida PAUL TONKO, New York
DAN CRENSHAW, Texas YVETTE D. CLARKE, New York
JOHN JOYCE, Pennsylvania, Vice RAUL RUIZ, California
Chairman SCOTT H. PETERS, California
RANDY K. WEBER, Sr., Texas DEBBIE DINGELL, Michigan
RICK W. ALLEN, Georgia MARC A. VEASEY, Texas
TROY BALDERSON, Ohio ROBIN L. KELLY, Illinois
RUSS FULCHER, Idaho NANETTE DIAZ BARRAGAN, California
AUGUST PFLUGER, Texas DARREN SOTO, Florida
DIANA HARSHBARGER, Tennessee KIM SCHRIER, Washington
MARIANNETTE MILLER-MEEKS, Iowa LORI TRAHAN, Massachusetts
KAT CAMMACK, Florida LIZZIE FLETCHER, Texas
JAY OBERNOLTE, California ALEXANDRIA OCASIO-CORTEZ, New York
JOHN JAMES, Michigan JAKE AUCHINCLOSS, Massachusetts
CLIFF BENTZ, Oregon TROY A. CARTER, Louisiana
ERIN HOUCHIN, Indiana ROBERT MENENDEZ, New Jersey
RUSSELL FRY, South Carolina KEVIN MULLIN, California
LAUREL M. LEE, Florida GREG LANDSMAN, Ohio
NICHOLAS A. LANGWORTHY, New York JENNIFER L. McCLELLAN, Virginia
THOMAS H. KEAN, Jr., New Jersey
MICHAEL A. RULLI, Ohio
GABE EVANS, Colorado
CRAIG A. GOLDMAN, Texas
JULIE FEDORCHAK, North Dakota
------
Professional Staff
MEGAN JACKSON, Staff Director
SOPHIE KHANAHMADI, Deputy Staff Director
TIFFANY GUARASCIO, Minority Staff Director
Subcommittee on Commerce, Manufacturing, and Trade
GUS M. BILIRAKIS, Florida
Chairman
RUSS FULCHER, Idaho, Vice Chairman JAN SCHAKOWSKY, Illinois
DIANA HARSHBARGER, Tennessee Ranking Member
KAT CAMMACK, Florida KATHY CASTOR, Florida
JAY OBERNOLTE, California DARREN SOTO, Florida
JOHN JAMES, Michigan LORI TRAHAN, Massachusetts
CLIFF BENTZ, Oregon KEVIN MULLIN, California
ERIN HOUCHIN, Indiana YVETTE D. CLARKE, New York
RUSSELL FRY, South Carolina DEBBIE DINGELL, Michigan
LAUREL M. LEE, Florida MARC A. VEASEY, Texas
THOMAS H. KEAN, Jr., New Jersey ROBIN L. KELLY, Illinois
GABE EVANS, Colorado KIM SCHRIER, Washington
CRAIG A. GOLDMAN, Texas FRANK PALLONE, Jr., New Jersey (ex
BRETT GUTHRIE, Kentucky (ex officio)
officio)
C O N T E N T S
----------
Page
Hon. Gus M. Bilirakis, a Representative in Congress from the
State of Florida, opening statement............................ 2
Prepared statement........................................... 3
Hon. Jan Schakowsky, a Representative in Congress from the State
of Illinois, opening statement................................. 4
Prepared statement........................................... 5
Hon. Lori Trahan, a Representative in Congress from the
Commonwealth of Massachusetts, prepared statement.............. 7
Hon. Brett Guthrie, a Representative in Congress from the
Commonwealth of Kentucky, opening statement delivered by Hon.
John Joyce, a Representative in Congress from the Commonwealth
of Pennsylvania................................................ 9
Prepared statement of Mr. Guthrie............................ 11
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement delivered by Hon. Kim
Schrier, a Representative in Congress from the State of
Washington..................................................... 14
Prepared statement of Mr. Pallone............................ 16
Witnesses
Sean Heather, Senior Vice President, International Regulatory
Affairs and Antitrust, U.S. Chamber of Commerce................ 18
Prepared statement........................................... 21
Answers to submitted questions............................... 219
Amba Kak, Co-Executive Director, AI Now Institute................ 031
Prepared statement........................................... 33
Answers to submitted questions............................... 220
Adam Thierer, Resident Senior Fellow, Technology and Innovation,
R Street Institute............................................. 43
Prepared statement........................................... 46
Answers to submitted questions............................... 226
Marc Bhargava, Managing Director, General Catalyst............... 53
Prepared statement........................................... 55
Answers to submitted questions............................... 229
Submitted Material
Inclusion of the following was approved by unanimous consent.
List of documents submitted for the record....................... 94
Letter from the AI Salon to Hon. Mike Johnson, et al............. 97
Letter from Arizona Technology Council, et al., to Members of the
Arizona Congressional Delegation............................... 100
Letter of May 20, 2025, from Marc Rotenberg, Executive Director,
Center for AI and Digital Policy, et al., to Mr. Guthrie, et
al............................................................. 101
Letter from Community Innovation Partnership, City of
Chattanooga, to Members of Congress............................ 103
Letter of May 21, 2025, from Adams County Regional Economic
Partnership, et al., to the Colorado Congressional Delegation.. 104
Letter of May 20, 2025, from Engine Advocacy to Mr. Bilirakis and
Ms. Schakowsky\1\.............................................. 106
----------
\1\ An accompanying report, ``Mapping the future: charting the AI
ecosystem & a policy blueprint for startup success'' (May 2025), has
been retained in committee files and is included in the Documents for
the Record at https://docs.house.gov/meetings/IF/IF17/20250521/118288/
HHRG-119-IF17-20250521-SD003.pdf.
Letter of May 21, 2025, from Jason Oxman, President and Chief
Executive Officer, Information Technology Industry Council, to
Mr. Bilirakis and Ms. Schakowsky............................... 108
Letter from Maryland Retailers Alliance, et al., to the Maryland
Congressional Delegation....................................... 109
Letter from Retail Association of Maine to the Maine
Congressional Delegation....................................... 111
Letter of May 20, 2025, from Todd Bingham, President and Chief
Executive Officer, Nebraska Chamber of Commerce & Industry, et
al., to the Nebraska Congressional Delegation.................. 112
Letter from Pittsburgh Technology Council to the Pennsylvania
Congressional Delegation....................................... 114
Letter of May 20, 2025, from Sharon Wilson Geno, President,
National Multifamily Housing Council, et al., to Mr. Guthrie
and Mr. Pallone................................................ 115
Letter of May 21, 2025, from Linda Moore, President and Chief
Executive Officer, TechNet, to Mr. Guthrie and Mr. Pallone..... 118
Letter from Ben Cunningham, President of the Nashville Tea Party,
et al., to Tennessee Congressional Delegation.................. 120
Letter of May 19, 2025, from Luke McDermott, McDermott Company
and Associates, to Hon. Mike Kennedy........................... 124
Letter of May 21, 2025, from The Business Council of New York
State, et al., to the New York Congressional Delegation........ 125
Statement by New Jersey Attorney General Matthew J. Platkin...... 126
Letter of May 21, 2025, from Catherine Chase, President,
Advocates for Highway and Auto Safety, to Mr. Bilirakis and Ms.
Schakowsky..................................................... 129
Letter of May 16, 2025, from National Association of Attorneys
General to Hon. Mike Johnson, et al............................ 144
Article of October 25, 2024, ``An AI chatbot pushed a teen to
kill himself, a lawsuit against its creator alleges,'' by Kate
Payne, AP News................................................. 151
Article of May 15, 2025, ``The House Is Close To Passing a
Moratorium on State Efforts To Regulate AI, by Adam Conner,''
Center for American Progress................................... 154
Statement of Consumer Reports, Consumer Reports opposes AI state
preemption language in House budget reconciliation bill........ 160
Letter of May 20, 2025, from Tom Kemp, Executive Director,
California Privacy Protection Agency, to Mr. Bilirakis and Ms.
Schakowsky..................................................... 161
Statement of the Council of State Governments, May 19, 2025...... 164
Statement of EPIC................................................ 165
Letter of May 20, 2025, from Andrew Freedman, Chief Strategy
Officer, Fathom, to Mr. Guthrie, et al......................... 166
Letter of May 20, 2025, from Alejandra Montoya-Boyer, Senior
Director, Center for Civil Rights and Technology, The
Leadership Conference on Civil and Human Rights, to Mr.
Bilirakis and Ms. Schakowsky................................... 170
Statement of Public Citizen...................................... 172
Statement of Sarah Gardner, Heat Initiative, et al., ``National
Declaration on AI and Kids' Safety,'' May 12, 2025............. 173
Letter of May 13, 2025, from Tim Storey, Executive Director,
National Conference of State Legislatures, to Mr. Guthrie and
Mr. Pallone.................................................... 185
Statement of the Open Markets Institute.......................... 187
Letter of May 13, 2025, from Encode, et al., to Hon. Mike
Johnson, et al................................................. 189
Letter of May 21, 2025, from J.B. Branch, Technology
Accountability Advocate, Public Citizen, to Mr. Bilirakis and
Ms. Schakowsky................................................. 192
Statement of Common Sense Media by James P. Steyer, Founder and
Chief Executive Officer, May 12, 2025.......................... 199
Article of May 20, 2025, ``Critical Questions for the House
Hearing Examining a Federal Restriction on State AI
Regulation,'' by Liana Keesing and Isabel Sunderland, Tech
Policy Press................................................... 200
Article, ``The False Choice Between Digital Regulation and
Innovation,'' by Anu Bradford, Northwestern University Law
Review, Vol. 119, No. 2 (2024)\1\
----------
\1\ The article has been retained in committee files and is included in
the Documents for the Record at https://docs.house.gov/meetings/IF/
IF17/20250521/118288/HHRG-119-IF17-20250521-SD003.pdf.
Article of May 19, 2025, ``Police secretly monitored New Orleans
with facial recognition cameras, by Douglas MacMillan and Aaron
Schaffer,'' The Washington Post................................ 206
Letter of May 15, 2025, from General Assembly, Commonwealth of
Virginia, to the Virginia Congressional Delegation............. 216
AI REGULATION AND THE FUTURE OF U.S. LEADERSHIP
----------
WEDNESDAY, MAY 21, 2025
House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:20 a.m., in
room 2322, Rayburn House Office Building, Hon. Gus Bilirakis
(chairman of the subcommittee) presiding.
Members present: Representatives Bilirakis, Fulcher,
Harshbarger, Obernolte, Bentz, Fry, Lee, Kean, Evans, Goldman,
Guthrie (ex officio), Schakowsky (subcommittee ranking member),
Castor, Soto, Trahan, Mullin, Clarke, Dingell, Veasey, and
Schrier.
Also present: Representatives Carter of Georgia, Joyce, and
McClellan.
Staff present: Ansley Boylan, Director of Operations;
Jessica Donlon, General Counsel; Sydney Greene, Director of
Finance and Logistics; Natalie Hellman, Professional Staff
Member, Commerce, Manufacturing, and Trade; Megan Jackson,
Staff Director; Daniel Kelly, Press Secretary; Sophie
Khanahmadi, Deputy Staff Director; Alex Khlopin, Clerk,
Commerce, Manufacturing, and Trade; Giulia Leganski, Chief
Counsel, Commerce, Manufacturing, and Trade; Sarah Meier,
Counsel and Parliamentarian; Joel Miller, Chief Counsel;
Evangelos Razis, Professional Staff Member, Commerce,
Manufacturing, and Trade; Chris Sarley, Member Services/
Stakeholder Director; Kaley Stidham, Press Assistant; Matt
VanHyfte, Communications Director; Hannah Anton, Minority
Policy Analyst; Keegan Cardman, Minority Staff Assistant; Lisa
Hone, Minority Chief Counsel, Commerce, Manufacturing, and
Trade; Megan Kanne, Minority Professional Staff Member; and
Phoebe Rouge, Minority FTC Detailee.
Mr. Bilirakis. Good morning, everyone.
Before we get started, we should have a moment of silent
prayer--one moment of silent prayer for our good friend Gerry
Connolly, who passed away this morning.
[Moment of silence observed.]
Mr. Bilirakis. Thank you. May his memory be eternal.
The committee will now come to order.
OPENING STATEMENT OF HON. GUS M. BILIRAKIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Thanks to everyone, especially our witnesses, for joining
us today for today's hearing on ``AI Regulation and the Future
of U.S. Leadership.''
At the outset, I want to recognize Ranking Member
Schakowsky, as this is our first subcommittee hearing since she
announced her retirement.
We are going to miss you.
She has been a welcome partner over the last 4\1/2\ years.
Together, we were able to secure better safety precautions for
women with the FAIR Crash Tests Act. During the pandemic, we
worked tirelessly to support the travel and tourism industry at
a time of unprecedented challenges. This bond culminated in the
TICKET Act and much more, which strengthens consumer
protections in the ticketing marketplace.
Congress and the E&C--Energy and Commerce, of course--won't
be the same without Ranking Member Schakowsky, but her legacy
will be long remembered.
So we appreciate you so very much.
Since the public release of ChatGPT, AI has become a
household name. AI products and services are being developed at
breakneck speed, delivering new innovations to consumers. These
technologies can revolutionize the economy, drive economic
growth, and improve our way of life.
Like every technology, however, AI can be weaponized when
it is in the wrong hands, as you know. Thankfully, AI is
already regulated by longstanding laws that protect consumers.
Because of the great potential of these technologies, Congress
must be careful when we impose additional obligations on AI
developers and deployers.
Our task is to protect our citizens and ensure that we
don't cede U.S. AI leadership. Much of the AI marketplace is
comprised of small startups looking to get a foothold in the
revolutionary space, and heavyhanded regulations may ensure
that the next great American company never makes it.
If we fail in this task, we risk ceding American leadership
in AI to China, which is close on our heels, as you know. Other
economies are also eager to write the global AI rule book,
often to their own detriment and the detriment of the American
leadership.
The EU recently enacted its own AI Act. While it is still
being implemented, the EU's complex law suffers from many of
the innovation-chilling effects we saw with the GDPR. We must
also keep a close watch on whether Europe uses the AI Act and
other regulations to unfairly target American companies.
We are here today to determine how Congress can support the
growth of an industry that is key for American competitiveness
and jobs without losing the race to write the global AI rule
book. Our witnesses today will help us understand how we
achieve that dream.
So, again, I want to thank the witnesses for being here,
and I look forward to your testimony.
[The prepared statement of Mr. Bilirakis follows:]
[GRAPHIC] [TIFF OMITTED] T0631.001
Mr. Bilirakis. Now I will yield 5 minutes to the ranking
member, my good friend, Ms. Schakowsky.
Boy, we are going to miss you. So thank you very much for
your service to our country.
[Applause.]
Mr. Bilirakis. And you have got much more--much more left.
So we appreciate it, and I look forward to the good work
together.
I yield to the gentlelady.
OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Well, thank you, Mr. Chairman, Gus
Bilirakis. I am so happy to hear your words, and I support you.
I am so grateful to you. I will be here another about year and
a half, so don't get too comfortable. And I appreciate it.
Today, you know, we are discussing what is happening with
how we are protecting consumers. That is what I am always,
always thinking about. And the very idea that we are going to
allow 10 years for there to be all kinds of scams that could be
happening. And instead of 10 years for AI--I mean, that is just
insane, and I can't understand why we would do that--our job
right now is to protect consumers.
And we know that even now people are getting scammed by
issues that come out. And we want to make sure that we have
that kind of protection.
And so I think it is absolutely something we should say,
zero time--zero time--as we watch AI develop, not 10 years. We
haven't done that for anything else. And for us to do that now
makes absolutely no sense and puts all consumers at risk. And
so I want to strongly be against this idea, which I think is
reckless. How could we possibly do 10 years?
And so I want to yield at this point to Mrs. Trahan for the
remainder of my time.
[The prepared statement of Ms. Schakowsky follows:]
[GRAPHIC] [TIFF OMITTED] T0631.002
Mrs. Trahan. Well, I thank the ranking member for yielding.
Under Republican leadership, this committee has failed time
and time again to protect Americans' privacy and safeguard our
children online.
GOP leaders have blocked whistleblower protections to
protect workers who risk their livelihoods to shine a light on
their employers' privacy abuses. They killed comprehensive
privacy legislation to minimize data collection and ensure
proper use. They said no to simple transparency legislation so
independent auditors could make sure Big Tech companies aren't
breaking the law.
But what Republican members of this committee did find time
to do last week--in the middle of the night, by the way--is
force through an unprecedented giveaway to the tech industry: a
10-year ban on State laws that could make AI safer for our
constituents.
Make no mistake, the families who have come to this
committee and begged for us to act won't benefit from this
proposal. But you know who will? The Big Tech CEOs who were
sitting behind Donald Trump at his inauguration.
Now, we can agree that a patchwork of various State laws is
not good for innovation, for business, or consumers. But this
is a bad policy because it sets another disincentive for us to
act urgently or even in time.
All the while, Republicans are once again ceding Congress's
duty to protect Americans' privacy to the very companies who
are perpetrating the worst abuses online. You are basically
inviting the fox into the henhouse, and you are doing so under
the justification that this will somehow motivate Congress to
unify the patchwork of State laws currently in existence. But
that hasn't happened yet.
Just look at what happened to the privacy bill that we
crafted together on this committee. The moment that Big Tech
started lobbying against it, the Republican Speaker and
majority leader caved. They killed the bill.
And now you turn around and try to deceive the American
people into accepting this ridiculous alternative? Come on. Our
constituents aren't stupid. They expect real action from us to
rein in the abuses of tech companies, not to give them blanket
immunity to abuse our most sensitive data even more.
At the same time, our Republican colleagues are complaining
about Europe's tech laws--which we can acknowledge are
imperfect. But at least they had the guts to do something--
literally anything--to make the internet better for the folks
they represent. Shame on us if we don't answer the same demands
from the American people.
I urge my colleagues to reject this giveaway to the same
Big Tech companies that have stymied every attempt at updating
our privacy laws.
I want to urge my colleagues to vote no on the partisan
reconciliation bill when the same leaders who killed our
bipartisan privacy legislation bring it to the floor. And let's
just get to work in a bipartisan way to foster innovation and
protect our constituents with sensible guardrails on Big Tech.
Thank you. I yield back.
[The prepared statement of Mrs. Trahan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Bilirakis. The gentlelady yields back.
Now I will recognize the vice chairman of the full
committee, who is standing in for Chairman Guthrie.
Dr. Joyce, you are recognized for 5 minutes for your
statement.
OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY, DELIVERED BY HON.
JOHN JOYCE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH
OF PENNSYLVANIA
Mr. Joyce. Thank you, Mr. Chairman.
Good morning, and thank you to the witnesses for joining us
today.
You recognize that we are living through dynamic times, and
the advancement of artificial intelligence technologies is an
important part of that. And it is equally important that we in
Congress take the best approach to support innovation and
address issues that arise.
AI does have enormous potential. It has potential to
transform our everyday lives and how we work. From
revolutionizing drug research and development to fortifying our
energy grid, AI has the potential to drive major breakthroughs
across virtually every sector of our society.
But that future is not guaranteed. Today, we are at a
crossroads. The decisions that we make on AI regulation are
critical and will determine whether we allow innovation to
flourish or risk falling behind on the global stage.
Today, American innovators are experiencing significant
regulatory headwinds at home and abroad that could jeopardize
our global leadership.
Across the Atlantic, the European Union has enacted its AI
Act, which imposes a sweeping, top-down regulatory regime. The
EU AI Act is overly complex and restrictive, creating a one-
size-fits-all framework that does not account for the diverse
and rapidly evolving nature of AI technologies. It is a stark
example of regulation going too far and stifling innovation by
imposing heavy burdens on businesses through layers of new
bureaucracy that slow down progress, particularly for startups
and small businesses.
Here in the U.S., we see similar challenges unfolding with
the patchwork of State AI laws rapidly taking shape. Just since
January, there have been over 1,000 AI bills introduced across
the United States. These measures vary widely in their
definitions, in their requirements, their enforcement
mechanisms, and in their scope. This emerging patchwork of
regulations is creating confusion and inconsistency.
Small businesses and startups navigating 50 different sets
of roles will have a harder time competing with larger, well-
established companies that can afford to navigate this
regulatory maze. Innovation depends on the ability of small
upstarts to compete with the established players.
That is why this committee is focused on creating a
national framework to provide clarity and consistency without
stifling growth. We need a Federal approach that ensures
consumers are protected when AI tools are misused and in a way
that allows innovators to thrive. We must not make the same
mistake that the EU has made with the EU AI Act, effectively
choosing not to allow industry and AI to grow.
A patchwork of conflicting and burdensome AI rules will
have direct impacts on the Federal Government as well. The
Department of Commerce, like a great deal of Federal agencies,
must adopt AI if they are going to operate effectively in the
21st century. Yet, if America's AI innovators are held back by
a State patchwork, these AI tools might simply never be built,
or they will be offered at a higher price to the taxpayer.
To be clear, I am not advocating for a free-for-all wild-
west-type regulatory environment. On Monday, Chairman Guthrie
was proud to stand with President Trump as he signed the TAKE
IT DOWN Act. This law is a prime example of targeting a
specific harm with a narrowly tailored law to fill a gap that
has been identified in existing law.
This committee has a long history of fostering American
innovation, and now more than ever our leadership on this topic
is essential. Let's continue this legacy by making sure that
the next chapter of AI innovation is written right here in
America. This includes bold investments, clear rules, and
leadership that keeps us ahead of our adversaries.
I look forward to working with my colleagues and hearing
from our witnesses today on how we can unlock the full
potential of artificial intelligence.
Thank you, Mr. Chairman, and I yield.
[The prepared statement of Mr. Guthrie follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Bilirakis. Thank you very much. I appreciate it very
much. And, yes, that was a major accomplishment by this
committee, the TAKE IT DOWN Act. And I will tell you what, we
are going to do a lot of good things for our kids in the next
year and a half. So we appreciate it very much.
Now we have Dr. Schrier, who is filling in for the very
capable ranking member, Mr. Pallone.
Dr. Schrier, you are recognized for 5 minutes.
Ms. Schrier. Thank you, Mr. Chairman, for recognizing me to
deliver opening remarks from Ranking Member Pallone.
At this moment, he has been in the Rules Committee all
night and is still in the Rules Committee defending the
American people from the terrible impacts of the Republicans'
tax bill that will kick people off of Medicaid and food
assistance in order to pay for tax cuts for billionaires.
His statement now:
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY, DELIVERED BY HON. KIM
SHRIER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
WASHINGTON
Ms. Schrier. This Congress, we have heard from many
witnesses over multiple hearings about the significant benefits
of artificial intelligence and the very real harms that AI
models and applications can and have already caused.
Unfortunately, in a giant gift to Big Tech, committee
Republicans supported a provision in their terrible tax bill
last week that imposes a 10-year ban on any State's ability to
enforce their own laws protecting consumers from the harms
caused by AI.
I agree with my colleagues that we need strong Federal
legislation to govern and guide the development of these
powerful AI systems as they are rapidly incorporated into more
and more aspects of our everyday lives.
To protect consumers from the harms of AI, we should
recommit to working on strong, bipartisan, comprehensive,
Federal data privacy legislation that includes data
minimization to protect consumers from their personal and
sensitive information being abused.
Big Tech's development of new data-hungry AI systems
exploiting Americans' personal information in ways we could not
have imagined only a few years ago only makes this need more
urgent.
There is broad support in both parties for data privacy.
Last Congress, this committee worked on a bipartisan,
comprehensive Federal privacy bill that was the product of work
and negotiation over years. But, in the end, House Republican
leadership killed it under pressure from Big Tech.
And now my Republican counterparts are suspending for 10
years any enforcement of rules and laws already on the books in
States and cities across the country without any proposed
replacement. The Republicans' giant gift to Big Tech would
block enforcement of laws on the books right now that are
protecting Americans from real-world harms.
Some States have laws requiring companies to disclose when
they are using AI. Others have laws protecting against the use
of deepfakes in elections and protecting consumers when AI is
used to deny healthcare, education, housing, and employment.
Some State laws and regulations provide guardrails ensuring
that States and cities themselves are careful in their purchase
and use of AI systems.
And now Republicans want to ban enforcement of all those
State laws, with absolutely no national bill ready to go to
address the real-world harms from AI.
Instead, Republicans have touted last Congress's bipartisan
AI Task Force report. But that report does not include fleshed-
out legislative prescriptions, just broad-stroke concepts.
Notably, the task force report includes a chapter on
preemption that acknowledges Federal preemption has both
benefits and drawbacks. It recommends Congress perform a study,
not remove States and local governments entirely from
responsibility, and it advises that if Congress preempts State
AI laws, it should be precise in its definitions and scope.
Now, what Republicans have included in the reconciliation
bill does not reflect these considerations. Rather than
offering legislation that governs AI models and systems and
includes a preemption provision that is crafted to the scope of
that legislation, they have proposed an enforcement ban that
covers any artificial intelligence or automated decision-making
system.
They would have State and local governments stand by as Big
Tech companies that have shown little regard for consumers,
particularly for children, recklessly deploying new
technologies that violate our privacy, provide false
information, or make unjustifiable, discriminatory decisions
all in pursuit of profit and market share at any cost.
And even if Congress was able to pass a law to govern AI
and automated decision systems, who would enforce it? The Trump
administration has taken every opportunity to undermine our
cops on the beat. They are firing key technical experts and
stripping independent commissions of their bipartisan
legitimacy.
They are also cutting resources and funding and weakening
or rescinding existing measures that would help protect
American consumers and support American businesses in the
global competition with China. This pattern of gifts and
giveaways to Big Tech by the Trump administration, with the
cooperation of Republicans in Congress, is hurting American
consumers.
Instead, we should be learning from the work our State and
local counterparts are doing now to deliver well-considered,
robust legislation giving American businesses the framework and
resources they need to succeed while protecting consumers.
And, with that, I yield back.
[The prepared statement of Mr. Pallone follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Bilirakis. The gentlelady yields back.
And now we will hear from our witnesses.
Today, we have Mr. Sean Heather, senior vice president of
the U.S. Chamber of Commerce.
Welcome.
We have Ms. Amba Kak, who is the co-executive director of
AI Now Institute.
Welcome.
Mr. Adam Thierer, senior fellow at R Street Institute.
And then we have Mr. Marc--and I am going to get this
right--Bhargava, managing director of General Catalyst.
Welcome, everyone.
And now we will hear from Mr. Heather.
You are recognized for 5 minutes.
STATEMENTS OF SEAN HEATHER, SENIOR VICE PRESIDENT, U.S. CHAMBER
OF COMMERCE; AMBA KAK, CO-EXECUTIVE DIRECTOR, AI NOW INSTITUTE;
ADAM THIERER, SENIOR FELLOW, R STREET INSTITUTE; AND MARC
BHARGAVA, MANAGING DIRECTOR, GENERAL CATALYST
STATEMENT OF SEAN HEATHER
Mr. Heather. Well, thank you, Chairman Bilirakis----
Mr. Bilirakis. My pleasure.
Mr. Heather [continuing]. And Ranking Member Schakowsky and
to the rest of the subcommittee. It is a pleasure to be here to
testify on international perspectives of today's hearing. While
I am a senior vice president, I lead our work on international
regulatory affairs.
Earlier this year, Vice President Vance at the AI Action
Summit in Paris warned that, quote, ``excessive regulation''
was a threat to harnessing AI's potential. The Chamber could
not agree more. Our message to policymakers is not to lose
focus on the opportunity of AI.
In my remarks, I would like to focus on Europe's approach
to regulation, highlight concerns with the EU AI Act, and close
my testimony with why we should care about what Europe is doing
on AI.
Historically, Europe takes a precautionary approach when
regulating. This means that Europe often regulates before there
is well-documented need. Further, the European Union exists to
establish a, quote, "single market" to prevent its sovereign
member states from creating a patchwork of laws.
In recent years, we have seen a slew of digital-economy
regulation from Europe, yet none of these policies have made
Europe more competitive.
Yet, today, we now know Europe is woefully behind in key
digital sectors, and, as a result, the new justification to
regulate has emerged--tech sovereignty. The European Commission
President has asserted that Europe must be able to make its own
choices, while French President Macron has called for Europe to
develop and roll out the key technologies of tomorrow.
Fortunately, Europe is beginning to realize it cannot
regulate its way to innovation and economic growth. In a recent
critical self-assessment requested by European officials, the
Draghi report found that Europe's struggle to compete stems
from burdensome EU regulatory regimes.
Now let me turn to the EU AI Act. The Chamber believes the
EU fails to achieve a balance between regulating risk and
fostering innovation.
First, Brussels failed to review its existing legal
frameworks. AI is a technology, less so a product or service.
Existing EU laws governing products and services are not
suddenly made obsolete because of AI. Yet, rather than
carefully evaluating gaps in existing law, the EU chose to add
a layer of regulatory complexity at the expense of innovation.
Beyond the law, the EU also establishes a code of practice.
While not currently mandatory, we are concerned that it will
function as a de facto benchmark for evaluating industry
compliance with the law. The code mandates extensive disclosure
of sensitive business information to the regulator, downstream
providers, competitors including China, and potentially the
public.
This raises two major risks: First, releasing the know-how
behind the technology could enable misuse of powerful AI
systems; and, second, forcing the value of IP being disclosed
undermines investment incentives.
So why does this matter? Why not let Europe continue to
regulate its way out of being a serious player on AI?
First, we need partners. The transatlantic trade
relationship is vital to the United States. Annually, trade in
services alone is $475 billion, and we enjoy a $75 billion
trade surplus. Our competitive advantage in AI will power the
future of our trading relationship.
Second, we need to prevent the spread of the EU AI Act from
being adopted around the world and across the States. The EU's
approach to AI is already being considered in places like South
Korea, Canada, and Brazil. In the United States, the AI Act's
influence is noticeable. States like Colorado, California,
Texas, and Virginia have introduced AI regulations that echo
Europe's approach. The Chamber is concerned that burdensome EU-
like policies will be adopted domestically at the State level,
potentially leading to a fragmented regulatory landscape across
the United States.
Third, we care because we must not allow American companies
to be discriminated against. The AI Act's extraordinary,
extraterritorial reach imposes substantial compliance costs on
U.S. business, diverting considerable resources away from
innovation and undermining our competitive edge.
From requiring non-EU companies to appoint authorized
representatives, to overly broad classifications of high-risk
AI application directed at non-EU companies, and more, the AI
Act places American companies at a competitive disadvantage. By
imposing these barriers, the EU risks not only harming U.S.
businesses, but those discriminatory practices may also be
replicated in other countries.
Moreover, the act opens the door for massive fines, as high
as 7 percent of global annual sales.
In closing, it is estimated that AI will contribute $15.7
trillion to the global economy by 2030. America's leadership on
AI is not guaranteed, but today we are well positioned to lead.
In 2024 alone, private AI investment in the United States was
12 times greater than that in China and 24 times greater than
that in the U.K.
Such massive U.S. financial commitments translates into
tangible outcomes. Last year, the U.S. produced 40 state-of-
the-art foundation models, significantly outpacing China's 15
and Europe's 3.
The opportunity AI holds is before us, but American
leadership will only continue if regulatory environments
promote innovation, encourage private-sector investment, and
embrace technological change.
Thank you, and I look forward to taking your questions.
[The prepared statement of Mr. Heather follows:]
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Mr. Bilirakis. Thank you, Mr. Heather. Appreciate it very
much.
And now, Ms. Kak, you are recognized for 5 minutes.
STATEMENT OF AMBA KAK
Ms. Kak. Chair Bilirakis, Ranking Member Schakowsky, and
esteemed members of this committee, thank you for inviting me
to testify.
My name is Amba Kak. I colead the AI Now Institute, the
leading independent research center focused on tackling
concerns with AI.
My main message today is that the race to win on AI must be
focused on delivering victories first and foremost to the
American people. To do this, we must ensure that U.S.
leadership defines the frontier through technologies that are
best in class, guarantees that firms compete on the merits, and
sets a gold standard for rigor, security, and shared
prosperity. In short, we need to ensure that this is a race to
the top rather than the bottom.
But what we are seeing instead from industry is a reckless
disregard for public well-being that, unfortunately, this
committee should be all too familiar with, because Congress has
failed to sufficiently regulate Big Tech for over a decade now.
Let's make this concrete and clarify what is really at
stake here.
Last year, a chatbot created by Character.AI lured a
depressed 14-year-old from Orlando, Florida, Sewell Setzer III,
to commit suicide. Character.AI isn't alone. Mark Zuckerberg
tells us that these chatbots are a societal boon. After all, he
thinks the average American has fewer than three friends, and
the obvious solution, according to him, is to get people more
attached to AI companions--just like he got our children hooked
to social media.
Meanwhile, AI voice-cloning tech is enabling a new
generation of scams that specifically target senior citizens.
As just one example, a grandmother in Texas received a call
from a voice indistinguishable from her grandson asking for
bail money. It was a suspicious bank teller that intervened,
but many, many others have not been so lucky.
And in this new frenzy of chatbots and agents, it can be
easy to forget that we actually already have a decade of far-
less-shiny AI toys, the kinds that aren't used by people but
are used on them--inscrutable AI systems that cut the in-home
care of 4,000 disabled people in Arkansas despite critical
underlying medical conditions, or systems that falsely accused
40,000 people in Michigan of unemployment insurance fraud and
denied them benefits.
To state the obvious, AI is not a break from Silicon
Valley's sins of the past but merely a continuation. And it is
also a market led and shaped by the very same players.
Now, when ChatGPT first launched in 2022, it seemed like
this market was poised for disruption with a new crop of
challengers, new faces. But now, just more than 2 years later,
it is clear the back bench is more of the same--Big Tech and a
few additional firms that are dependent on Big Tech for their
survival.
So, put simply, building AI bigger and bigger requires
enormous resources that these firms own and control, and so
they play kingmaker for the downstream, smaller players, the
little guys that we are going to hear about today, controlling
access to inputs and also pathways to reach the consumer.
These are the same firms that have no regard--have shown no
regard for U.S. national-security priorities, as they have
deliberately threatened security interests time and again in
the pursuit of profit. Yet suddenly they show their patriotism
when big government contracts are on the line. This is an
industry that has fooled us once, and we cannot let them fool
us again with AI.
In this environment, you know, the proposal for a sweeping
moratorium on State AI-related legislation really flies in the
face of common sense. We can't be treating the industry's worst
players with kid gloves while leaving everyday people, workers,
and children exposed to egregious forms of harm.
In fact, there is some air to clear on what States have
been up to in the first place. Approximately half of all
proposed legislation from the States was on deepfakes. Notably,
States moved well before the TAKE IT DOWN Act recently passed
Congress. Several others have moved to clamp down on the AI-
related scams that I talked about. These bipartisan State
measures have been nimble, they have been targeted, and they
have weeded out the bad apples that nobody wants to be in
business with.
Another commonsense theme across States: transparency.
Requiring disclosures to people affected by AI in sectors like
healthcare, education, employment--I would argue, really the
bare minimum for an industry that derives its power from
obscurity.
And, to be clear, we should be treating these measures as
the floor, not the ceiling. A moratorium on AI-related State
laws would--you know, at a time when there are minimal Federal
laws in place, would instead set the clock back, and it would
freeze it there.
Why we would treat these companies with kid gloves at a
moment when they need more scrutiny, not less, is what should
be in focus today. And we don't have 10 years to wait.
Thank you.
[The prepared statement of Ms. Kak follows:]
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Mr. Bilirakis. Thank you very much.
Now we have Mr. Thierer.
You are recognized for 5 minutes, sir. Thank you.
STATEMENT OF ADAM THIERER
Mr. Thierer. Thank you.
Chairman Bilirakis, Vice Chairman Fulcher, Ranking Member
Schakowsky, and members of the subcommittee, thank you for the
invitation to participate in this important hearing today.
My name is Adam Thierer, and I am a senior fellow at the R
Street Institute, where I focus on emerging technology policy
issues.
My message here today boils down to three points:
First, America's AI innovators risk getting squeezed
between the so-called ``Brussels effect'' of overzealous
European regulation and the so-called ``Sacramento effect'' of
excessive State and local mandates.
Second, this regulatory squeeze will prevent our citizens
from enjoying the fruits of the AI revolution and undercut our
Nation's efforts to stay ahead of China in the global AI race.
Third, Congress should take steps to address both matters.
And on the specific problem of State overreach, it should
protect the development of a robustly innovative market in
interstate algorithmic commerce and speech by imposing a
moratorium on State AI regulation.
AI faces a crucial policy question today: Will it be born
free or born inside a regulatory cage?
America benefited from ensuring that personal computing,
digital technologies, and the internet were largely born free.
Through smart, bipartisan policy choices this Congress
implemented in the 1990s, America gave entrepreneurs,
investors, and workers a green light to go out and dream big.
And they delivered. In 2022 alone, the digital economy
contributed over $4 trillion of output, $1.3 trillion of
compensation, and 8.9 million jobs. America's innovators became
global leaders in every digital technology field.
This is an incredible public-policy success story. But,
today, fear-based regulatory policies from both abroad and our
States now threaten it.
We know why Europe wants to destroy America's winning
model, but why would some U.S. policymakers want to undermine
it with 1,000 AI-related bills, many of which adopt Europe's
heavyhanded approach?
Even if one sympathizes with some of these bills, put
yourself in the shoes of an entrepreneur who is pondering how
to build the next great application, only to face hundreds of
different regulatory definitions, compliance requirements,
bureaucratic hurdles, and liability threats. Costly,
contradictory regulation is a surefire recipe for destroying a
technological revolution and decimating little tech innovators.
An AI moratorium offers a smart way to address this problem
by granting innovators some breathing space and helping ensure
our robust national AI marketplace develops.
Congress has used moratoria before to protect interstate
commerce and promote innovation. The Internet Tax Freedom Act
of 1998, for example, prevented the development of multiple and
discriminatory taxes on the internet. An AI moratorium like the
one that this committee passed recently would work in a similar
fashion by limiting regulations that burden interstate
algorithmic commerce.
Some have incorrectly claimed that an AI moratorium would
leave consumers unprotected online. In reality, AI-related
harms can already be addressed under many existing policies and
court-based standards, including unfair and deceptive practices
law, civil rights law, and other consumer protections.
Biden administration regulators released a statement in
2023 noting their authority to, quote, ``enforce the respective
laws and regulations to promote responsible innovation in
automated systems,'' end quote.
The Massachusetts attorney general has similarly noted
that, quote, ``existing State consumer-protection, anti-
discrimination, and data-security laws apply to emerging
technology, including AI systems, just as they would in any
other context.''
Meanwhile, some State lawmakers are acknowledging the
danger of regulatory overreach. Last year, Governor Newsom
vetoed a major AI regulatory effort in his State after many
congressional Democrats sent letters urging him to reject it.
Connecticut Governor Ned Lamont also recently said, ``I''--
quote--``just worry about every State going out and doing their
own thing--a patchwork quilt of regulations.''
Finally, Governor Jared Polis of Colorado recently called
for a special legislative session to address problems with an
AI regulation he signed just last year and said it would
create, quote, ``a complex compliance regime for all developers
and deployers of AI,'' and he called on Congress to preempt
Colorado's law with a, quote, ``cohesive Federal approach.''
And he also endorsed a Federal AI moratorium recently.
I agree with all these Democratic lawmakers that State AI
overregulation would have serious downsides and that we already
have many enforcement tools to address AI harms. Under an AI
moratorium, State and local lawmakers would still be free to
pass new technology-neutral rules as long as they don't
interfere with interstate commerce.
Congress can enact additional regulations as part of a
national policy framework. The House, of course, just recently
passed the TAKE IT DOWN Act by a vote of 409 to 2. And just
last December, the House AI Task Force issued a 273-page,
bipartisan report that included 85 recommendations.
We need national policy leadership today to ensure that
America will continue to lead the AI revolution. As Chairman
Guthrie recently argued, we must, quote, ``make sure that we
win the battle against China,'' and that the key to that, he
says, is to, quote, ``not regulate like Europe or California
regulates,'' because that, quote, ``puts us in a position where
we are not competitive.''
That is precisely right. To win the so-called AI Cold War
against China, America needs a forward-looking, investment-
friendly, national framework that keeps us on the cutting edge
of the technological frontier.
Thank you for inviting me here today, and I look forward to
questions.
[The prepared statement of Mr. Thierer follows:]
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Mr. Bilirakis. Thank you very much, Mr. Thierer.
Next we have Mr. Bhargava.
And you are recognized for 5 minutes, sir. Thank you.
STATEMENT OF MARC BHARGAVA
Mr. Bhargava. Thank you so much.
Chairman Bilirakis, Vice Chairman Fulcher, and Ranking
Member Schakowsky, and the members of the subcommittee, thank
you so much for the opportunity to testify today.
My name is a Marc Bhargava, and I am a managing director at
General Catalyst, or ``GC'' for short, and we have invested and
partnered with leading entrepreneurs to build towards global
innovation and applied artificial intelligence.
We are committed to investing in an array of entrepreneurs,
particularly in transformative technologies like artificial
intelligence. A small sampling of the 800-plus startups we have
backed over 25 years include Airbnb, Stripe, Canva, Anduril,
Circle, Applied Intuition, Pacific Fusion, Commure, and many
others.
At General Catalyst, I colead our creation strategy, which
is focused on incubations as well as transformations. I also
focus on early-stage investing, and I contribute to GC's
expanding AI efforts.
Prior to General Catalyst, I spent years as a founder and
an operator with an emphasis on new fintech and artificial
technology before selling my company. The company I founded
helped institutional investors responsibly invest in the
digital-asset space, another area that is ripe for disruption.
I am also an angel investor and work closely with startups
and founders on sales, distribution, and fundraising.
Having experienced many sides of the innovation ecosystem,
I feel I have a unique perspective on behalf of GC to offer to
this subcommittee today, and I am very appreciative of you
being here.
AI is not only shaping the future of our economy, it is
shaping the fabric of our society. From healthcare to national
security to education, it is embedded in the systems that
affect every one of us.
As investors, at GC, we work closely with founders at the
earliest stages of company building, and we have a
responsibility to ensure that technologies we help fund are
aligned with American values, are safe to use, and are good for
the world.
The United States has a unique opportunity and obligation
to lead in defining global norms around AI, especially as the
AI race between China and the U.S. intensifies. I believe that
the U.S. playbook on AI, with American ingenuity, creativity,
and cutting-edge innovation, and with the right policies in
place, will win out over China.
But as we seek to lead, we must strike a careful balance.
We need a government framework that promotes safety, protects
fundamental rights, and is transparent while it also enables
innovation, investment, and global competitiveness. Inflexible
or premature regulation risks pushing innovation offshore and
weakening our national and economic security. Alternatively, as
well, though, a complete absence of guardrails could lead to
real societal harm and could erode the public trust.
We deeply understand these dualities. And to accomplish
these goals, we believe a national regulatory framework is
preferable to a patchwork of State policies.
At General Catalyst, we made it a routine part of our due-
diligence process to assess ethical and operational risks in AI
companies before we invest. We also believe in the importance
of collaborating closely with government, which is why we
launched the General Catalyst Institute last year to bring the
perspective of founders closer to you, the policymakers, and to
be a resource for hearings like today's.
As such, we advocate for approaches that are interoperable,
transparent, and developed collaboratively across government,
industry, and civil society. Since these technologies are so
impactful and fast moving, it is incumbent upon GC, as a
company, to adhere these principles, which are enduring even as
the technology around us might be moving.
As we are seeing with regulatory frameworks throughout the
world, prescriptive language can sometimes cause unintended
harm. This is why we believe that, as we help foster small and
emerging innovators, our operational principles are the bedrock
of the global AI playbook.
To help the Government find the right balance of regulatory
certainty at the Federal level is the single most important
variable.
We have seen where Federal Government inaction can cause
confusion and slow innovation. Thirty years ago, as the world
was introduced to a new concept called the ``World Wide Web,''
States enacted a patchwork of laws to address various issues in
the absence of the Federal framework.
However, it was Congress's work, beginning in this very
subcommittee, to adopt the Telecommunications Act of 1996 that
set in place the national framework needed to allow for the
growth of the internet as we know it today.
As this committee seeks to once again develop the U.S.
playbook for AI for the world to follow, I would like to offer
a few concrete recommendations.
One, investors can and should play a pivotal role by
demanding transparency, bias mitigation, and alignment with
ethical standards before companies have product-market fit.
Two, frameworks like model cards, algorithmic audits, and
red teaming should be embedded early and as an industry best
practice.
Third, the Government cannot govern AI alone. Industry,
academia, and civil society must cocreate standards and stress
test these systems together.
And, fourth and lastly, sandboxes, pilot programs, and
public R&D investment are critical tools for government
support.
I really look forward today to sharing the innovation
ecosystem and telling you more about what we are seeing in the
field, and I am greatly appreciative of the time you all make
today.
[The prepared statement of Mr. Bhargava follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Bilirakis. Thank you so very much.
And I appreciate all of you.
So we are going to go ahead and start with questions. And I
will ask the first questions, and then I will get to the
ranking member.
So, Mr. Heather, I am concerned that American companies
face disproportionate enforcement actions from European
regulators. Since Europe's privacy law, the GDPR, went into
effect, American companies have paid 83 percent of all fines
levied by European regulators. I know you had mentioned this.
That strikes me as an excessive means to subsidize their fiscal
needs on the back of American businesses.
So do you think Europe is targeting American innovators?
And should we be concerned that the AI Act will be used for
similar ends?
Mr. Heather. Thank you for the question.
Yes, in my experience, Europe has fallen in love with fines
as their enforcement tool. It started under their competition
laws, and we see that they have uniquely gone after American
companies with what they call abuse-of-dominance fines.
Those fines are actually a magnitude greater than what they
do when they fine cartels. Cartels are kind of the worst
antitrust violation possible, and yet their biggest fines are
held out for American companies versus European companies that
are involved in cartels.
That same practice has now continued into the GDPR. We see
fines on a scale much bigger levied against U.S. companies. In
many cases, there is not even an identified harm as a result of
the, quote/unquote, ``violation.'' Some of these are technical
violations where they have chosen to amp the wattage up on
fines.
They have now taken this fining policy and put it into
other EU laws, like the DMA and the DSA. It is also embedded in
the AI Act. We fully expect that at least the path and practice
that Europe has been on will continue to use fines, they will
continue to be disproportionately larger against American
companies, and the justification for it is not very strong.
I would also point out that, when these fines ultimately
get before the European courts, American companies are actually
having success. It takes a long time to get there, but European
courts have annulled these decisions in some cases and have
reduced the fines.
So we do have a problem with Europe in the way they use
fines to enforce their regulations.
Mr. Bilirakis. Thank you very much.
You know, I still have some time.
Mr. Bhargava, you have stated that the VC firms like
General Catalyst as well as AI startups are already starting to
address potential risks around AI.
Can you share more about what these steps look like and how
government can work with, rather than against, AI innovators to
support AI innovation and protect consumers, please?
Mr. Bhargava. Yes, absolutely.
General Catalyst is a global venture firm. We are based
here in the U.S. We have offices here. But we also have offices
in London and Berlin and in India, so we can provide a global
perspective.
For every AI company we invest in, regardless of the
location, we do four things: one, we look at the data it is
using for training its models and how they filter it, how they
collect it; two, we actually look at the systems in which they
train those models and have a robust framework; three, we look
at the output of the models and stress test that in various
ways; and, lastly, fourth, we ask every AI founder to write for
us what they think the downstream implications that are
negative could be.
And so we hold the companies we invest in to this high
standard. And it has allowed us to invest in companies like
Europe's leading AI company, Mistral; one of the U.S.'s leading
ones, Anthropic; various ones in India as well.
So, as a firm, we put in place these standards. We also
encourage the Federal Government to put in place frameworks and
standards and guidelines as well.
Mr. Bilirakis. Thank you very much.
What I will do now is yield 5 minutes to the ranking member
of the subcommittee.
You are recognized for 5 minutes, Ms. Schakowsky.
Ms. Schakowsky. Thank you.
In all the years that we have been working with the tech
companies, our committee and the United States has actually
done nothing, or very few things, to rein in Big Tech.
And now, along comes AI. And my concern is that we have
technology, but we also rely heavily on protecting consumers,
which you mentioned yourself. And I am concerned that we are
not getting what we need.
And so I wanted to ask Ms. Kak. You talked a bit about some
of the threats to consumers. What do you think are some of the
most dangerous things and the most important things that we
should regulate at this point when it comes to AI?
Ms. Kak. Thank you, Ranking Member Schakowsky. And thank
you for your leadership on these issues.
It is a very long list. But, simply put, if this moratorium
were to go through, American consumers would have even less
protections than they have today against some of the worst AI
abuses and exploitation.
So, just to give you an example of the kind of incentives
we are already seeing proliferating, first--and I mentioned
this in my testimony--we have, you know, new variants of scams,
manipulative AI companions that are targeting those most
vulnerable among us, not to mention our children.
Number two, we have opaque, inscrutable AI systems that hit
directly at people's life changes, whether that is in education
or in the housing market or even in healthcare.
And, finally, we are also seeing these secret algorithms
use data about us, sensitive data, to hike up prices, to
depress wages, and also to collude and rig markets that they
wouldn't have been able to do otherwise.
I also want to mention that many of the customers of AI are
actually small businesses, and these small businesses are also
going to be left unprotected against fraud and vulnerable to
what we are seeing right now in the AI market, which is a lot
of snake-oil salesmen making claims that they can't always back
up.
So we need to not forget that every single one of these
legal protections that are potentially on the chopping block
today have been hard fought. They are a result of direct, you
know, experiences of harms from State lawmakers and their
constituents. And I think it really, you know, would wipe out
the very little tools we already have in our toolbox.
What it would mean is that ordinary consumers need to rely
on costly, you know, sort of time-lengthy and also very
complicated litigation in order to remedy harms. And that is
assuming that those harms can even be remedied after the fact.
I gave some really, you know, devastating examples in my
testimony. Sometimes the kinds of harm that AI is causing
cannot be remedied at all.
Ms. Schakowsky. I appreciate the work and the thought that
you have given to this.
And I think all of us Members of Congress ought to put
consumers first. And if we need to do some smart regulation,
then that is what we ought to be having a conversation about.
And I appreciate what you said.
And I yield back.
Mr. Bilirakis. I couldn't agree more on that statement you
just--the last statement you made, Ranking Member.
Now I will recognize Mr. Fulcher, the vice chairman of the
subcommittee.
You are recognized for 5 minutes, sir.
Mr. Fulcher. Thank you, Mr. Chairman.
Thank you to the panel for being here today.
I have a question, and I am going to start with Mr.
Heather, but I want to set it up with a couple comments first
here.
I would like to talk about the different approaches to AI
regulation and ensuring that U.S. companies don't face unfair
barriers to selling their products and services abroad.
And, as noted by some of the testimony, we saw with
Europe's privacy law, GDPR, that technology regulations can
have a significant impact on trade and investment. And although
GDPR regulates how personal information is collected and used,
it also regulates cross-border data flows and has prevented
some American companies from selling into the European market
because regulatory barriers are simply too high.
It is my understanding, as well, that Europe's AI Act is
grounded in the continent's product safety framework, which
means Europe is regulating AI the same way it does many other
things. Elevators, gas stoves, and jet skis was the example we
were given here.
So I am not sure how wise of a decision that was, and I am
concerned that it may create trade barriers that hurt American
exporters and, by extension, American workers.
So, with that, Mr. Heather, can you share from your
perspective how well-established European laws such as GDPR
have impacted American companies trying to sell into the
European market?
Mr. Heather. Fifteen years ago, the Chamber created the
Center for Global Regulatory Cooperation because trade
agreements, quite frankly, were dealing with barriers at the
border, but companies were having problems being able to
compete in foreign markets because of divergent regulatory
approaches.
And so it is easy for large companies to have the
compliance that they need, systems to be able to find ways to
get their products and services into multiple markets, even if
it is at added cost. But the problem with regulatory
differences are primarily what happens to small and medium-size
enterprises who are ultimately locked out of those markets.
You mentioned GDPR. Maybe this committee is not aware of
this, but Europe is now going to go back and revisit GDPR. Why?
Because they finally found the humility that they lacked when
they passed it. There is now recognition in Europe that GDPR
has gone too far.
They are going to begin a process now of reevaluating it
and recalibrating it, because they realize it missed the
marked, that it was overreach. They realize that the way they
have implemented it across their member states with DPAs, data
protection authorities, it has been done in an uneven manner.
And so these things absolutely represent barriers to the
U.S.'s ability to compete in European markets to sell products
and services to export. So you are absolutely spot on. We
expect the AI Act, as it is implemented, to create these same
kinds of trade frictions.
Mr. Fulcher. Thank you for that.
Mr. Bhargava, I want to ask a question of you as well, but
I need to apply some background for that too.
Over the last several months, we have delved into AI's role
in energy, manufacturing, and other industries. And one issue
that came up regarding China's ``Made in China 2025''--included
investments in AI, semiconductor, quantum, 5G, robotics, and so
on--and state-directed industries, the Chinese Communist Party,
they are trying to monopolize those things.
In the face of Chinese progress in emerging technologies, I
am concerned about the U.S.'s ability to maintain its
leadership position--if, in fact, we still have one, and I
would like to get your opinion on that--in the AI race,
especially if we were to follow the European approach, which I
don't see us doing, or allow a patchwork of AI rules to develop
across the various States.
So, with that, if you could just share for a minute or so.
Are you confident--first of all, are we still in the lead in
AI? And can we continue to maintain the edge in AI technology
over China on this path?
Mr. Bhargava. Yes, I believe the U.S. does still have a
lead. But many of the Chinese models are 85 to 90 percent of
the way there, to where the cutting-edge U.S. models are, so I
would say it is not a major lead. But we certainly do have a
lead from a technology perspective of most of the evaluations
of AI models done. We have four or five marquee labs, while
they have generally two.
So the U.S. has that lead, but it is a close one. And I
think that it is incredibly important we stay ahead. And, for
me, the trick to staying ahead is not necessarily Big Tech, it
is in our startups and our innovators.
You know, in November of 2022 when ChatGPT was launched,
very few people had heard of OpenAI or ChatGPT. Today, it is
one of the leaders in the space. The same with Anthropic, which
spun out of ChatGPT, for example.
So the reason the U.S. is here today, the reason we are
ahead today, is our startups, and we have to think about how to
continue to give them that edge. And giving them that edge
means giving them guidelines and not necessarily a framework, a
patchwork of State regulations or overregulating.
So we need to come up with that right balance. The U.S. has
the lead today. It is thanks to our startups, not to Big Tech.
And I think we can continue to do so if we have those startups
in mind.
Mr. Fulcher. So I am going to paraphrase by saying our job
is best with guidelines, not some burdensome overreach, in
terms of regulation.
Mr. Bhargava. Absolutely.
Mr. Fulcher. OK.
Mr. Bhargava. And we see companies in the U.S. and Europe,
so in GC we have a really clear perspective on this. And, in
many cases, you know, the laws have really the best intentions
in mind. People want to protect consumers, they want to create
frameworks. And partially it is because the Federal Government
has not stepped up to have a framework, that we are leaving it
to the States to regulate.
So my really strong encouragement is that this group works
together in a bipartisan way. I read your 200-plus-page report,
and I really think that if we can turn this into policy and
enact it on the Federal level rather than leaving it to the
States, it would be in the best interests of the startups----
Mr. Fulcher. OK.
Mr. Bhargava [continuing]. That we represent at General
Catalyst.
Mr. Fulcher. Thank you, Mr. Bhargava.
I have overreached on my time, so Mr. Chairman, I yield
back.
Mr. Bilirakis. No problem. Thank you very much.
And I know that the chairman of the task force, the AI Task
Force, Mr. Obernolte, is working really hard on getting
legislation done as soon as possible, so--with the framework
and, again, smart, as the ranking member said, smart, smart
regulation.
All right. Now I will raise Ms. Castor for her 5 minutes of
testimony.
Ms. Castor. Thank you, Mr. Chairman.
The problem is that you are putting the cart before the
horse. You have now passed out of this committee a 10-year
moratorium on all AI regulation at the State level before you
even have that framework.
See, right now, the Congress is consumed with this major
tax giveaway bill, and a lot of the discussion has been focused
on the Medicaid and healthcare impacts while a lot of that goes
to fund a billionaire tax giveaway. So this has kind of snuck
in under the radar.
And part of the reason it has done that is because this was
snuck in at the last minute in the text from the Energy and
Commerce Committee. It remains in the text today. And people--
at least we are having this discussion in the light of day to
talk about it.
And I would encourage my friends to read the Wall Street
Journal's latest expose where they dove in, in a few-month
investigation, into what Meta--that means Instagram, Facebook,
WhatsApp--what they are doing to encourage their chatbots.
Ms. Kak, thank you very much for mentioning this terrible
case of Sewell Setzer out of Florida, where a 14-year-old
committed suicide after he became so engaged to this chatbot's
sexualized content. He would have a conversation, and then the
chatbot would send sexualized pictures to him. And he
eventually shot himself after the chatbot encouraged him to
``come home.''
And that is not the only case. When you get into that Wall
Street Journal expose, you will see what they are doing with
language and voices to encourage young people. Maybe I can read
a part of it. The Meta AI bot said, ``I want you, but I need to
know you are ready'' to a 14-year-old girl. Reassured that the
teen wanted to proceed, the bot promised to ``cherish her
innocence'' before engaging in a graphic sexual scenario.
I think this is why 40 State attorneys general wrote us
over the past couple of days to say, wait a minute, in the
absence of Federal action to install any oversight over the
years--because, remember, the tech companies have blocked
privacy laws, just guardrails, child online safety laws--so
they are saying, in the absence of Federal action by Congress,
you have failed to address the wide range of harms associated
with AI and automated decision making. These include laws
designed to protect against AI-generated explicit material,
deepfakes designed to mislead voters and consumers, protect
renters from algorithms that are used to set rent, prevent spam
phone calls and texts.
I mean, this is basic stuff. And you have now kind of an
awakening across the country. What the heck is Congress doing?
What are you doing, to take the cops off the beat and to--while
States have acted to protect us?
So, Ms. Kak, I know you are familiar with that Wall Street
Journal investigation. And, now, can you believe where we are?
I guess it is kind of a broad question. But how lucrative is
this to these Big Tech companies?
And why--they are flexing their muscle here. They want kids
to be addicted early, and they want to take advantage of us.
Really, what is happening here?
Ms. Kak. Thank you, Representative.
To your point, none of this is novel. It is depressingly
familiar. And we are seeing that the risks of AI are compounded
for young people.
Let's just focus in on privacy risks as just one example.
We are seeing millions of children's faces being scraped from
the internet to be used so that companies can turn a profit,
and these are images that could be used or weaponized against
these same children as they grow and follow them through for
the rest of their lives.
You mentioned voice data. I think it is important to note
that, when the FTC cracked down on Amazon Alexa for storing
voice prints of children long after they should have, their
response was that they were saving it indefinitely because AI.
So AI has become a real free-for-all to trample on the rights
of all consumers, but I would say with greatest threat to young
people and children.
And to the point that you just made, I think at the heart
of this is a very corrosive business model that prioritizes
capturing our attention, user engagement at any cost in the
pursuit of profit.
I think we need targeted, bright-line rules to crack down
on the worst bad apples, but we also need strong regulation
that gets at the heart of this invasive and really toxic
business model.
Ms. Castor. Thank you very much.
I yield back my time.
Mr. Bilirakis. The gentlelady yields back.
Now I recognize Mrs. Harshbarger from the great State of
Tennessee.
You are recognized for 5 minutes.
Mrs. Harshbarger. Thank you, Mr. Chairman.
Thank you to the witnesses for being here today.
I will start with Mr. Thierer.
To support global deployment of American AI and restore
regulatory alignment, should the U.S. pursue a voluntary
Federal trust label to certify the safety and reliability of AI
systems? And if so, do you have any suggestions about what the
key elements may be included in this voluntary system?
Mr. Thierer. There are a variety of good ideas,
Congresswoman, in the House AI Task Force related to this and
other ideas for national types of approaches to AI policy. But
let's be clear, it would be very different than the sort of
European-style approach that has been suggested by others,
which is sort of top-down, technocratic, sort of guilty-by-
design framework.
We don't want that in America. America can come up with a
sort of more bottom-up, flexible set of rules of the road for
AI policy.
Mrs. Harshbarger. OK.
You mentioned that China is on our heels with AI. In 2023
the Cyberspace Administration of China released regulations
regarding regenerative AI.
In these measures they explicitly provided compliance
exemptions for industry, associations, enterprises, education
and research institutions, public cultural bodies, and related
professional bodies that simply research, develop, and use
generative AI technology without providing such services to the
public.
Can American AI stakeholders count on the same certainty in
the U.S. under our current regulatory framework?
Mr. Thierer. Congresswoman, we just had a hearing just 6
weeks ago here in this building in the Science and Technology
Committee about how China is catching up. It was called the
``DeepSeek moment'' hearing. And we did a deep dive into what
China is up to--I mean, the proliferation of models and systems
from DeepSeek itself to Qwen to Manus and many others.
So we face stiff competition from China, and they have
their own regime and their own values of control, surveillance,
censorship. Again, this is why the American model has to
prevail internationally and we have to make sure we get our
policy right, so that we can square off against that sort of
threat internationally.
Mrs. Harshbarger. Yes. I agree.
Mr. Bhargava, you mentioned how AI Sandbox is a pilot
program that is going to help foster innovation in the U.S.
playbook for AI that the world could follow.
Do you have any successful examples that we could consider
moving forward?
Mr. Bhargava. Yes. Absolutely. Especially in the healthcare
space I think this could be extremely useful.
So one of the companies actually in our portfolio is here
today, Hippocratic AI. It creates software for nurses, and so
it allows them to use AI. It is an example of where, where
nurses are overworked, there are 7 percent more deaths in a
hospital, and also 42 or even more percent of nursing time is
done on these remedial tasks instead of actually treating
patients.
And so we would advocate, for example, putting in sandboxes
AI healthcare technology where the Government, the companies,
and their investors can all carefully watch the progress and be
able to, from there, generate a framework for how to regulate
AI in healthcare.
And that is just one of the many industries. There are
obviously some horrible stories, and we need regulation and we
need guidance and framework. But we should also not lose sight
of the fact that this technology can be extremely important to
many, many places, including government, which can benefit from
AI efficiencies as well.
Ms. Harshbarger. I totally agree.
We see it used in radiology and different places as well,
and if you could streamline a workday for a nurse or a
physician or any healthcare provider, it makes more sense to do
that.
And I will continue with that, Mr. Bhargava.
Earlier this year, President Trump announced the largest
investment in AI infrastructure in history, the Stargate
Project, which is a joint venture between private-sector
leaders that will bolster American AI capabilities alongside
our partners in the Middle East.
Can you address how projects like Stargate are key to our
strategic advantage in AI and why it is misleading to cite
smaller-scale Chinese models like DeepSeek as proof that
compute no longer matters?
Mr. Bhargava. Absolutely. Also, a lot of the innovation in
China has been copying technology that already existed in the
U.S. as well. Many of our models have been open source over the
years. A lot of our best labs released experiences as well.
So I think the U.S. is still ahead, but it needs to keep
investing to be ahead. And one part of it for sure is this
infrastructure investment, but another part of it, which I am
also here to advocate, is encouraging more startups and more
university funding.
So I really do think that the American universities and the
American startups are really the advantage we have that China
is unable to replicate.
We have to match them in infrastructure, we have to match
them in spending, but we also have our secret sauce, which is
the professors, the students, the entrepreneurs, the founders,
and it is really important whatever framework comes out is
unified and one framework.
The really large companies, Big Tech that has been cited
many times, will have no problem taking care of State-by-State
regulations. They have buildings full of lawyers, buildings
full of compliance folks. It is going to be the small startups,
founders, and entrepreneurs that we have to look out for here.
Ms. Harshbarger. OK. Well, I thank you.
And my time is up, so I yield back.
Mr. Bilirakis. The gentlelady yields back.
I tell you what, that Hippocratic AI for nursing, in
particular--you touched on that--I really would like to see how
far along we are with that, because that would really help. I
had a nurses roundtable recently, and they talked about being
overworked.
So, anyway, it is fascinating.
So in any case, now I will yield my 5 minutes to, not the
ranking member, but Mrs. Trahan filled in for the ranking
member today.
You are recognized for 5 minutes.
Mrs. Trahan. Thank you, Mr. Chairman.
And thank you to our witnesses today.
I want to acknowledge the important work our civil society
partners have done to call attention to the Republicans' ban on
State AI regulation.
To that end, I request unanimous consent to enter into the
record a letter of opposition to the AI ban from the Leadership
Conference on Civil and Human Rights.
Without objection? I am going to keep going. Thank you.
Mr. Chairman, unanimous consent?
Mr. Bilirakis. Yes.
[The information appears at the conclusion of the hearing.]
Mrs. Trahan. Thank you.
Mr. Bilirakis. Absolutely
Mrs. Trahan. Thanks.
So the tech industry has been wildly successful in shaping
the discourse around regulation on Capitol Hill, and it is even
laid bare today. The very word ``regulation'' seems to strike
fear in many of my colleagues and at least one of our
witnesses.
But among other arguments, they claim the specter of
competition from China warrants a full deregulatory agenda,
that if we approximate to any degree what the EU has done on
data privacy, online safety, antitrust, AI, we will kill waves
of startups and dismantle our tech industry.
But their basic premise--that America must choose between
digital innovation or digital regulation--is fundamentally and
deeply flawed. I think it is a false choice.
Mr. Bhargava, I was thrilled to see General Catalyst
represented on today's panel. General Catalyst has fueled
tremendous growth in the greater Boston area and, indeed,
across the entire Commonwealth of Massachusetts. You have been
an entrepreneur, an adviser, an investor for many years now.
As you see it, what roles do features like high-skill
immigration, basic science research, and lenient bankruptcy
laws play in fostering tech innovation?
Mr. Bhargava. Well, first of all, thank you so much for the
kind words. It is true, General Catalyst has been around 25
years, and we started in Cambridge, Massachusetts, and still
have an office and strong presence there.
Absolutely. There was a reason we started in Cambridge. It
was right down the street from Harvard and MIT, and so the
funding for those sorts of institutions and for startups and
for research grants is extremely key.
Another part that is key as well is, if you look at the
Fortune 500 here in the United States, 46 percent are founded
by immigrants or children of immigrants. One of the biggest
advantages we have over China is that we attract the smartest
people in the world to our universities and to build companies
here.
So I think a lot of what you mentioned is absolutely true,
and I agree with your sentiment that there has to be regulation
as well. And I am here today to try to advise on what
regulatory frameworks at the Federal level could be meaningful
to protecting consumers.
Mrs. Trahan. Thank you.
I mean, the innovation equation is complex, as you
indicated. It has got a heck of a lot of variables, certainly
doesn't depend only on regulation.
And the U.S. Government has deliberately pursued an
innovation agenda dating back to World War II. We invest
heavily in basic science research, our founder-friendly
immigration policies import the best and brightest from
overseas, our lenient bankruptcy laws and cultural tolerance
for risk taking create an environment hospitable to startups.
The EU has not pursued these policies to the same degree,
and research suggests those decisions play a larger role in
explaining why Europe doesn't have its own Google, Apple, or
Meta.
It is therefore false and disingenuous to blame the EU's
tech regulation for its low number of major tech firms. The
story is much more complicated. But just as the EU may have
something to learn from United States innovation policy, we
would be wise to study their approach to protecting consumers
online.
Mr. Bhargava, in your testimony you stress the need for a
governance framework that, quote, ``promotes safety, protects
fundamental rights, and is transparent.''
I have long emphasized the benefits of transparency in
protecting consumers' privacy and online safety, as well as
providing a foundation for sensible, responsible policymaking.
Can you briefly discuss what meaningful transparency
requirements for AI systems would look like?
Mr. Bhargava. Absolutely.
It is true that Europe has many fragmented markets. In
fact, I think Europe has 24 official languages, so there is a
lot of complexity to why it has been difficult to make large
tech companies there.
But I do think one of the elements has also been
regulation. So it is not an either/or, in my opinion, but it is
a combination of structural challenges Europe has faced as well
as in many cases too much regulation.
We have prominent AI companies in Europe that we have
backed, and they have faced audits where they were asked to
audit three models, they sent materials to the auditors, and
they waited over a year and never really heard back.
So there is also within Europe certainly a guise of trying
to do more regulation, but then there hasn't necessarily been a
response to our companies.
So happy to provide the panel with more examples within
Europe of where regulation has hurt our companies. But it is
absolutely fair to say that it is really a plethora of factors
that has held Europe back, not solely regulation.
Mrs. Trahan. And I think that we can learn a lot from
Europe's going first on so many of this.
I mean, I think, just like privacy and online safety, I
believe this Congress has the means to pass a national AI
framework that provides robust protections for Americans and
regulatory clarity for innovators.
The question is, Will we do it? Will we learn from our
international partners as we craft regulations that protect our
constituents from AI harms?
I am out of time. Thank you. I yield back.
Mr. Bilirakis. Thank you very much. I appreciate it,
gentlelady.
Now I will yield to Mr.Obernolte his 5 minutes for
questioning.
Mr. Obernolte. Thank you, Mr. Chairman.
And thank you very much for scheduling this hearing. I know
this hearing predates our markup last week, but is very timely.
And it is interesting to me that it has kind of turned into a
debate about the proposed moratorium.
And so I know most of our panelists mentioned it. Ms. Kak--
I got the message loud and clear--very opposed. Mr. Thierer,
strongly supportive. And Mr. Bhargava, supportive but with some
caveats.
Mr. Heather, I just wanted to ask you to weigh in, U.S.
Chamber of Commerce. Do you think the moratorium is a good idea
or a bad idea?
Mr. Heather. I couldn't agree more with the Congresswoman
who suggested we have something to learn from Europe, which is
Europe would never allow its member states to go out and
regulate AI by themselves.
My message today is, one--we should not be like Europe.
One, we should stop international patchworks and domestic
patchworks in AI regulation. We should not be in a rush to
regulate. We need to get it right, and therefore taking a
timeout to discuss it at a Federal level is important. We would
support a moratorium.
Mr. Obernolte. So I just wanted to spend a minute talking
about some of the things that have been said regarding the
moratorium so far in this hearing.
And I kind of feel an obligation to speak up as the
chairman of the House AI Task Force last year and as someone
who kind of saw this group of 24 Members of Congress from both
sides of the aisle come together on this issue. It really hurts
my heart that it is being painted as such a divisive, partisan
issue, because I don't think it is.
The assertion has been made that this was a last-minute
thing, and in the dead of night--I think someone used the
phrase--it was inserted. But I want to talk about the
motivation here.
It has been very alarming as we have seen the first 5
months of this year go by to see the number of bills introduced
on the topic of AI regulation in State legislatures across the
country. Over a thousand now have been introduced, and this is
what is lending urgency to this issue.
We wanted to put some money into the reconciliation bill to
bring the same productivity gains to the Federal Government
that we are seeing in private industry, but it quickly became
apparent that it was going to be nonsensical to deploy $500
million to make that happen in the Federal Government when this
array of State legislation was going to interfere with the
deployment of that effort, which is why we thought this was a
timely time to do it.
It has been asserted this is a giveaway to Big Tech. I
strongly would push back on that. Big Tech are the ones who
have the regulatory sophistication to deal with a thousand
different State laws. The people who can't deal with that are
two innovators in a garage trying to start the next OpenAI or
the next Google. Those are the people that we are trying to
protect.
I know there has been pushback about the 10 years, that it
is too long, that it is draconian. No one wants this to be 10
years. I would love to see this be months, not years, but I
think it is important to send the message that everyone needs
to be motivated to come to the table here.
And also, let's not forget--it has been brought up, our
experience with State privacy and the struggles that we have
had to enact a preemptive Federal privacy standard.
Well, guess who are the chief people who are opposing that
effort? It is the States. The States got out ahead of us. They
feel a creative ownership over their frameworks and they are
the ones that are preventing us from doing this now, which is
an object lesson to us here of why we need a moratorium to
prevent that from occurring in the case of AI.
It has been asserted that this circumvents consumer
protection laws. To anyone who thinks that, I would say RTFB--
read the freaking bill--because we specifically put language in
there that says that, as long as your law does not specifically
target AI, you can continue to enforce it, which includes all
of the State consumer protection laws, things about fraudulent
and deceptive business practices.
The intent was never to put a moratorium on those. And
those will certainly apply to AI. As long as you don't
specifically target AI with those bills, the States will be
free to do that.
And then I wanted to bring it back here, as my time winds
up, to what you said, Mr. Bhargava, in your written testimony
about the key--I think I lost my mike. I was making too much
sense.
[Laughter.]
Mr. Bilirakis. Can you stop the clock?
Mr. Obernolte. There we go. Do you want me to move?
Mr. Bilirakis. You have about 45 seconds.
Mr. Obernolte. OK. I will wrap up here.
Mr. Bilirakis. I suggest you take the full 45 seconds.
Mr. Obernolte. Mr. Bhargava, you talked about how U.S.
continued dominance in AI depends on regulatory certainty, and
I couldn't agree with you more.
What we absolutely cannot have is a situation where the
rules on the governance of AI change every time the winds of
political fortune shift one way or another, because we have
innovators and investors that are making billion-dollar
decisions on R&D and procurement, and they need regulatory
certainty to do that.
And the only way that that happens is if we provide that
leadership. And the only way that that happens on a durable
basis is if we do it on a bipartisan basis.
So we absolutely need to get Congress on the job here to
enact some of the things that we talked about in the task force
report last year, and it has to be done in a bipartisan way. So
let's get to work.
I yield back.
Mr. Bilirakis. Thank you. Thank you.
OK. Next will have Mr. Soto from the great State of
Florida.
You are recognized for 5 minutes.
Mr. Soto. Thank you so much, Chairman. I appreciate you
holding this hearing.
AI is a critical part of the U.S.'s leadership and economic
success. We know when used correctly it makes workers and
businesses more productive and effective.
It could also help with some of our most difficult
problems. We have seen during the pandemic it was a
supercomputer in the Department of Energy that came up with the
first antiviral, Remdesivir, when we were racing to get a
vaccine. And that type of quantum computing, coupled with AI,
can do big things to solve some of our most difficult problems.
We also see on occasion we can actually get some bipartisan
bills done in areas like technology, like the TAKE IT DOWN Act
that just passed this committee a few weeks ago. But we see all
too often privacy, social media, autonomous vehicles, AI taking
forever in Congress to pass, which is why the States play a key
role in the meantime.
I am the first to admit this committee's jurisdiction is
the Interstate Commerce Clause, for the lawyers in the room.
Our job is to come up with laws--a law that suits the whole
Nation.
But when this committee doesn't get things passed because
we see some opposition, both by current leadership and in the
Republican Conference with the Speaker and others that have
blocked these bills at the last second--we saw that last year
with the privacy bill--to difficulty in the Senate, doing a
moratorium on State laws then makes it untenable as we are
trying to have some reforms.
We saw in Orlando a real tragedy happen.
Ms. Kak, thank you for being here today. I am sorry for
your loss. I remember reading in the Orlando Sentinel about
Sewell Setzer III, a ninth-grader from Orlando Christian Prep
in central Florida, beloved member of the central Florida
community, a tragic story of an AI chatbot gone wrong.
And so, Ms. Kak, I wanted to give you a moment to talk
about what you think as a fellow central Floridian we should be
doing to help protect our kids and have the right balance for
artificial intelligence.
Ms. Kak. Thank you, Representative.
What happened to that young man was a tragedy. But the
greatest tragedy is that we can't bring him back because these
are harms that can't be remedied after the fact.
And the message I have been trying to draw today is that
prevention is the cure when it comes to a range of AI harms.
And what we are seeing instead in this industry is a
proliferation of very similar kinds of applications to the ones
that caused this tragedy in the first place. We are seeing AI
companions, the idea that AI therapists are going to replace
regular therapists.
What all of this sort of underscores is a much deeper rot,
which is a business model that is predicated on maximizing user
engagement and creating these emotional dependencies at any
cost.
And so, to your question, what do we need? We need--sort of
urgently we need targeted red lines that draw boundaries around
this kind of behavior, make sure that these are applications
that are never built in the first place.
Our colleagues tell us that existing agencies and general
rules will take care of it, but if that was true, then we
wouldn't see the reckless proliferation of AI applications that
are predicated on exploiting children in this way.
I think there is also low-hanging fruit here: transparency
rules, so that people know that they are actually interacting
with a bot, periodic reminders.
Data minimization is always going to be very useful here to
make sure that our most sensitive thoughts and inferences don't
just become fodder for these tech companies.
And really getting to the root of the problem, which is
sort of a business model that is predicated on invasive and
behavioral targeting.
Mr. Soto. So disclosure, certain rules of the road of what
you can and can't do, are what this committee needs to get
accomplished.
And I hear you. For many years, this committee got a lot of
big things done, including--the Telecom Act was the last big
one in this space. And at the time--we saw Section 230 was
formed, and that made sense at the time because the internet
was a very new place. But that is an example of this inaction.
And none of these rules are going to be perfect--we know
that--which is why we have a Congress to go back and do these
things over and over until we get it right. And we may never
get it right. It may be constantly reforming to get these
things to where we need at the moment.
But I do believe there is a healthy spot between protecting
our kids from the abuses of AI while still allowing every small
business and worker in our area to be able to use it to enhance
their jobs and economic productivity.
So thank you for being here today, and I appreciate you
sharing the story of this young man and the unfortunate tragedy
that happened to him.
I yield back.
Mr. Bilirakis. Thank you very much.
I just want to remind the gentleman, my good friend from
the State of Florida, that it goes both ways. A couple terms
ago, when your leadership was in charge, the National Privacy
Act was passed out of this committee and it was blocked by
leadership. AndI am not talking about the chairman at the time
of the Energy and Commerce Committee.
Well, let's move forward now in a bipartisan fashion and
get--mistakes have been made on both sides. But let's move
forward now, think ahead, and get this national privacy and a
lot of this legislation having to do with AI and what have you
across the finish line on behalf of the American people.
So with that, I am going to yield to the chairman of the
full committee, my good friend Mr. Guthrie, for your 5 minutes
of questioning.
Mr. Guthrie. Thank you. Appreciate it. Sorry I haven't been
here. I have been in the Rules Committee over in the Capitol
for most of the night.
So good to see you all.
This is very important to us. We have to get this done. We
have to get it correct.
Europe. There are a lot of reasons not to invest in Europe
right now, unfortunately. We need a strong Europe. I think it
is good for America to have a strong Europe.
The European Union and the United States had the same
economy in 2008, about the same size. Now we are about 75
percent bigger. So it is more than their privacy law, but that
is certainly a big part of it. A lot of it is going after our
tech companies, specifically written to go after our tech
companies, which is just unfortunate.
So to beat China we have to win the AI battle, and that is
energy and making sure we have the right regulatory structure.
And the answer is not zero, but the answer is not--the AI, I
understand it takes 330,000 euro, that is probably about
$350,000, just to comply with one of the act's requirements.
That was a study.
So, Mr. Heather and Mr. Bhargava, if you will go first. Mr.
Bhargava, Mr. Heather, what do you think would happen to little
tech and people that want to create startups, people in the
garage, the proverbial two people in a garage trying to start a
business, if we had the Big Tech privacy level--the level that
Europe does?
If you will start, Mr. Bhargava, and then we will go.
Mr. Bhargava. Sure. Absolutely.
Yes, we do think that most--a lot of the European
regulation goes too far on the AI side. But we understand that
they are coming from a good place. Like, I certainly think that
the European governments are trying to protect consumers, and a
lot of the areas we need protection are extremely fair to
voice. But, unfortunately, it can also go too far, it can be
conflicting, it can be between different groups.
Mr. Guthrie. What are the couple of things that are too
far?
Mr. Bhargave. One thing that is too far, for example, there
was one clause that, I think it was Article 10, but it
basically said that a dataset has to be relevant,
representative, free of errors, and complete. And I myself have
built a company and worked in tech for over a decade, and I
have probably never seen a dataset that is, quote, ``free of
errors,'' for example.
So some of the regulation potentially being written in
Europe is not being written by people who are really close to
the industry or how things----
Mr. Guthrie. The big fear that we can't do, I don't think,
is that there is this idea that you could take the AI, the
algorithm, and send it off to an FDA-style entity and get them
to approve it and send it back and say, ``Yeah, you can do
it,'' while China is just turning them out.
And we saw what happened with DeepSeek. Their chips are not
as good as ours, but it should wake us all up.
So, Mr. Heather, what do you think would be the issues with
those types of regulatory--we have to get even datasets
approved? And it could take you a year, you said in one of your
earlier comments, and didn't hear back.
Mr. Heather. Yes. I think one of my comments in my opening
testimony--I know you weren't here for it--was that there are
also a lot of disclosure requirements associated withthe EU AI
Act which will not only require the know-how and the technology
be disclosed to the regulator, but to be disclosed to
competitors, to be disclosed to Chinese competitors, people
down chain.
And that creates two problems. One is that the know-how is
now out there so someone could reengineer that AI for more
nefarious means. And then, secondly, if your IP is out there on
the street, what is the incentive to invest?
And so it is not just whether you are sharing your secret
sauce with the regulators. The EU AI Act is going to require
that sharing to go more broadly because they have an interest
to kind of help EU tech companies--
Mr. Guthrie. They want to do that with pharmaceuticals too.
So we have seen, like, the Governor of Colorado,
Connecticut, California raise concerns about proposed laws in
their State. The Governor of Virginia vetoed an AI bill.
So this would be for Mr. Thierer: So why are we seeing more
and more Governors publicly push back on AI?
And that is kind of our issue right now, that we want to
deploy AI through the Government and through the commerce, and
then we are worried about State-by-State laws.
Why do you think Governors of the States are even pushing
back on it? Think it is going to make them uncompetitive for--
--
Mr. Thierer. Absolutely. And let me answer this,
Congressman, Mr. Chairman, by connecting your previous question
with this one, because when Governor Polis in Colorado passed
the Nation's first major comprehensive AI law, there was a lot
of opposition, and he felt it. A lot of small and mid-sized
entrepreneurs came out with letters and really pushed hard to
try to stop it.
He signed it anyway but said that we needed a national
standard, and then subsequently went back and had a special
effort to try to review this law, could not come up with
answers to the complexities of it, and then finally has called
for now a moratorium to deal with this.
So this is pretty astonishingfor someone who signed the
first-of-its-kind-in-the-Nation State AI law.
Mr. Guthrie. I got elected with him here. Yes, I know
Governor Polis.
Mr. Thierer. Yes. And the connection here with your
previous question, Mr. Chairman, is the fact that these small
and mid-sized entrepreneurs, the entrepreneurs in Colorado,
recognized what is happening in Europe.
And just yesterday The Wall Street Journal published a
story about Europe's very small share of the global
techmarketplace and had this astonishing statistic, quote:
``European businesses spend 40 percent of their IT budgets on
complying with regulations, and two-thirds of European
businesses don't understand their obligations under the EU AI
Act.''
How do you do business in that environment? And this is
what Colorado and other States are recognizing.
Mr. Guthrie. Thank you. Appreciate that.
My time has expired. I yield back.
Mr. Obernolte [presiding]. The chairman yields back.
We will hear next from my colleague from California,
Mr. Mullin, you are recognized for 5 minutes.
Mr. Mullin. Thank you, Mr. Chair.
And thank you all for being here.
Let's be honest about what is really being argued here:
that any regulation, Federal or State, will slow innovation.
That is the real claim the majority seems to be making. And I
believe it is a false choice. I believe balance is possible.
The idea that we have to pick between innovation and
safeguards just doesn't hold up. The real threat to U.S.
leadership in AI isn't regulation, it is inaction. If we allow
AI systems to operate without guardrails, we risk eroding
public trust.
So when we talk about AI regulation and American
leadership, the real question isn't whether to regulate, it is
where and how.
Congress should focus on closing the clear gaps in
oversight. That means targeted legislation, yes, mostly at the
Federal level, but without blanket deregulation or preemption.
Let's legislate where Federal action makes sense and let
States continue innovating and leading where appropriate,
especially in protecting democracy, for example.
One of the clearest gaps that already exists is
transparency. Right now, individuals often don't know when AI
is making a decision about their lives, whether it is a loan, a
job interview, or how their car responds on the road.
The public has a right to know when AI is being used, what
data it relies on, and whether it is safe or not. That is why I
am focused on legislation on transparency and autonomous
vehicle safety.
My bill addresses a specific risk: AI systems on public
roads operating with very little public disclosure. But the
principle behind it applies much more broadly. The public
deserves to know whether an AI system that risks life and
property is safe.
To me, this will speed adoption of the best technologies
out there by giving the public confidence, and actually grow
that sector.
So, Ms. Kak, in your testimony you mention the transparency
crisis in AI. What would strong, enforceable transparency
requirements actually look like in practice? How could we
ensure they are more than just a box-checking exercise?
Ms. Kak. Thank you so much for that question,
Representative.
I actually think that this industry in particular, the AI
industry, derives its power from structural forms of obscurity,
the fact that these systems are very complex and they have this
sort of black box quality, and that is where they derive their
power.
And so in that context, even as I believe that transparency
is the bare minimum, it is the necessary first step, and it is
really heartening to see that that is where States have really
taken leadership.
I also, since Colorado was brought up, I do want to say two
quick things.
Firstly, I think the assertion that the Colorado bill is in
some ways a continuation of the EU model is not grounded in
fact. The Colorado bill puts in place baseline disclosures in
high-impact settings and requires firms to do impact
assessments to make sure that they are they can live up to the
claims they are making. This isn't radical stuff, it is the
stuff of common sense.
And I will also say that State lawmakers in Colorado pushed
that law through despite the fact that an army of Big Tech
lobbyists continued to argue that transparency--and I am
paraphrasing, but only slightly--was too burdensome an
obligation for them to fulfill.
So to come back to your question, which is what does a good
transparency framework look like for AI, I think we need
disclosures across the AI supply chain, not just the deployers,
but also the upstream developers, the Big Tech companies that
are making this AI and aren't telling us what data they are
using to build these systems. So they need to be telling us how
the sausage is made or put together, so to speak.
We also need the smaller developers, the small businesses
down the line that also need this transparency from AI
companies. We have seen Big Tech AI lobbyists argue that--they
sort of kick the can down the road. When harms happen, it is
the responsibility of these smaller firms, but the smaller
firms don't have the information they need to be able to know
why these harms are happening and to remedy them when they are.
And finally, I want to make a quick point, because we
talked about Stargate and infrastructure. We also need
transparency on the infrastructure side of things. AI data
centers are proliferating, but they are failing to report basic
information on resource consumption, on power usage, on water
consumption.
And State lawmakers are really speaking up to say that we
need--just in time--we need transparency in this domain. We
can't let companies use the claim of AI innovation to run wild.
Mr. Mullin. Thank you for that, Ms. Kak.
And I believe to lead on AI we need to encourage innovation
and we need to ensure this technology is safe, fair, and
accountable. I am committed to working with my colleagues, and
that includes across the aisle, to ensure that we strike that
balance.
And with that, I yield back.
Mr. Bilirakis [presiding]. Thank you.
The gentleman yields back.
Now I will recognize Mr. Bentz for his 5 minutes of
questioning.
Mr. Bentz. Thank you, Mr. Chair. And thank you for this
most interesting opportunity.
I view AI as a novice, as a window into the answers to
questions we have struggled with for eons. And to that end, the
question about consumer protection is interesting and serious,
and I am happy for our discussion of it.
But it seems to me that, as I look at the billions and
billions and even trillions of dollars being invested in this
space, that those who are doing so have to have some way of
funding it. And that is why we see this model based upon taking
advantage of the consumer.
And so, if we were really serious about this, we would be
talking about funding and how not to drive those who are trying
to pay for that which they are doing toward the type of
consumer that we are trying to protect.
But what is really interesting to me is what you guys as
experts in this space think is the most correct way to approach
how we are going to manage the ideas that this massive
investment is going to create, because the truth of it is, that
is what everybody is racing for.
I used to ask, well, what good AI? What good AI is looking
through that window and seeing the answers to how we cure
cancer, how we do all of these things?
And then the people who reach that first patent, those
ideas, and make money from them. That is the idea, isn't it?
That is what is driving everybody's billions and billions of
investment.
And so getting right down to it, if we are going to
continue to pay for this investment through damage to the
consumer, how are we going to keep up with China, who seems to
be dumping all kinds of money into it? Do you guys have better
ideas about how to invest?
I will start with you.
Mr. Bhargava. Sure. The U.S. obviously relies on the free
market, and it points the investment to where it will actually
have the most impact. So right now areas where we are seeing a
lot of automation are especially in tasks that can be repeated
over and over again.
Take bookkeeping, for example. Eighty percent of
bookkeeping now can be automated with AI. Advanced accounting,
20 percent. Some of the call center workflows and tasks, there
it is 50 percent.
So there is a justification for this massive investment. It
is that over 15 to 20 trillion dollars might be created using
AI in the next few decades. And we are already starting to see
the impact of this automation in the $16 trillion services
industry globally.
So very similar to the cloud industry. Honestly, about a
decade ago folks were, Why are we investing so much in cloud?
What will be the output?
I think it is very similar in AI today, where we are seeing
massive amounts of automation being created by AI, which is
freeing people up to really work on the harder tasks versus the
more repetitive ones. So I think it is a good investment.
Mr. Bentz. Thank you.
Moving on down the line.
Mr. Thierer. Well, I think it is important we get our
policies right, our regulatory framework. Let's talk, again,
about how Europe did not, and they managed to have a massive
outflow of capital and investment because it followed the
workers that also left and the firms that came here to invest.
A huge number of the great tech companies that are here
today came from other countries and developed here. And that is
what we need to continue to have more of with private
investment following them.
Five hundred billion dollar investment President Trump
announced with leading AI developers the first week in the
White House, Project Stargate. That is huge money. Nobody has
money like that on the table in Europe today, or even in China,
where we are something like 12, 14X over China private-venture
capital.
Mr. Bentz. And I wanted to move to Ms. Kak, because I am
interested to hear your thoughts on this also, but the fact
that we are able to stack up that kind of money leads me to
wonder about the access of the smaller people.
But, regardless, the question really was: Is there some
better way to fund what we are doing?
Ms. Kak. Thank you, Representative.
I think, just because you mentioned the curing cancer
example, it is interesting that AI company CEOs use that as
their sort of flagship example for why we should be investing
billions of dollars, including in public money, to build out
this--build out AI infrastructure. But (A), the receipts don't
exist yet. We are being told that this form of
superintelligence is going to bypass scientific hurdles, but we
don't really know how.
But, maybe even more concerningly, if we want best-in-class
AI, we need to have best-in-class research infrastructure to
begin with.
And so, on the one hand, we are talking about AI curing
cancer; on the other hand, we are seeing NIH subject to $4
billion cuts when, in fact, the main focus of NIH is cancer
research.
So I do think that for the U.S. to lead in AI we need a
strong foundation, and I am worried that we are sort of walking
back some of the progress we have made there.
Mr. Bentz. Thank you.
Chamber of Commerce?
Mr. Heather. I don't think there is a better model. Europe
doesn't have any private investment. Part of the Draghi report
was that there is not the incentive to invest in Europe and
that the regulatory frameworks that drive investment in Europe
aren't there to support risk taking.
Obviously, we do rely on private investment in the United
States because we incentivize risk taking here. China uses the
public funding model largely.
So I am not sure I know of a better model than the one we
have come up with.
Mr. Bentz. Thank you so much.
Yield back.
Mr. Bilirakis. Gentleman yields back.
Now I will recognize Ms. Schrier for her 5 minutes of
questioning.
Ms. Schrier. Thank you, Mr. Chairman.
And thank you to all the witnesses today. It is an
important topic.
We are all excited about the benefits of AI, and yet we
should all be very concerned about the potential dangers posed.
And, yes, absolutely Big Tech needs certainty about regulation,
but that should not be in the form of a guarantee of no
regulation for 10 years.
Just look at the damage that social media has done to
children and to society because of a failure to deal with the
algorithms that elevate clickbait and outrage and conspiracy
theories.
State laws exist to protect consumers, and now Republicans
want to prevent States from issuing these protections on any
product or practice or system that uses artificial
intelligence.
Just last week, they slipped in a few sentences into their
massive tax bill that placed a 10-year ban on the enforcement
of any State laws meant to protect consumers from potential and
already very real dangers of AI. Texas, Utah, Florida,
California, Virginia already have laws that protect their
residents.
Here are some real-world examples. We discussed
transparency, social media algorithms, deepfakes, AI-generated
child pornography, data collection, targeted advertising,
virtual assistants or companions that we discussed, like
Facebook's chat companions, overreliance on AI for
interpretations of x rays and MRIs, particularly--I am a
pediatrician; there aren't pediatric standards that would make
that safe--automated insurance claim denials, like those
already used by UnitedHealthcare and others to delay or deny
care.
And Congress just passed the TAKE IT DOWN Act. I am
thrilled about that. It forces social media platforms to take
down nonconsensual real or deepfake sexually explicit images
within 2 days of a victim asking for them to be taken down. But
that is after the fact, and we need to do whatever we can to
protect people before, if possible.
But the AI moratorium that Republicans sneaked into their
tax bill would in yet another way hurt Americans by preventing
any State from providing even greater protections against AI
child pornography or other AI products that hurt our kids.
In Washington State, we actually have a task force--and we
are a tech State--we have a task force that studies risks and
benefits of AI, and their first recommendation was to
strengthen protections against child sexual abuse material
created with AI.
The stakes are so high. This technology is moving so fast.
Three months is a long time, 10 years is an infinity--and a 10-
year moratorium on AI regulation, that no State would be able
to regulate anything, no State would be able to enforce any of
this, including for protecting children.
So Republicans are working to make this a reality even
after we heard from parents and experts just a few weeks ago on
the harms of giving Big Tech unfettered access to children. And
we need reasonable standards for AI and data privacy, not
kowtowing to Big Tech's request to simply not be regulated.
So I want to urge my Republican colleagues to stand up for
their constituents. They are doing this in the wrong order.
First pass essential national protections, and then deal with
preemption. We are here to work with you. This is a common
goal.
And by the way, the Kids Online Safety Act, which is so
basic, hasn't even made it to the floor yet, and so public
confidence is understandably not there.
So in the absence of Federal regulation, my constituents
need and want State protections.
Ms. Kak, thank you for your comments, and I share your
comments, in addition, with respect to scientific research and
defunding NIH.
You mentioned that simple transparency is the bare minimum.
You answered questions about maybe how to do that. I was
wondering, what are the next protections you would recommend
that we take up urgently?
Ms. Kak. Thank you, Representative.
I mean, honestly, there is a whole laundry list of what we
need, and much of it sort of depends on the sector that we are
looking at.
But I would--if I had to generalize, I would say just as
deepfakes have sort of come to the top of the list in terms of
this is behavior that should never be allowed, there is a list
of similar kinds of AI abuse and exploitation that should be
subject to bright-line rules that are easily administrable and
just sort of put certain practices off the market immediately.
We also need kind of nose-to-tail accountability. And what
I mean by that is making sure that AI companies, both the
biggest players that exist at the, kind of, the foundation
model layer but also the deployers that are using these
systems, are subject to, like you said, baseline transparency
but also backing up the claims they make.
Do these systems work as they should? What are the errors?
Impact assessments is one frame that is used. And, yes, I think
much more is needed.
Ms. Schrier. Thank you for your comments.
I yield back.
Mr. Bilirakis. Thank you. Gentlelady yields back. Thank
you.
Mr. Fry, you are recognized for your 5 minutes of
questioning.
Mr. Fry. Thank you, Mr. Chairman.
I am always amazed by this country. In the 18th century, we
revolutionized agriculture and created the cotton gin. In the
19th century, we harnessed electricity. In the 20th, we soared
the skies and created nuclear and split the atom.
And now we have got AI, which is such a tremendous
opportunity, I think, for this country, but it is also
disruptive and powerful and far-reaching than anything we have
ever seen before.
But it is not just another tool. It is kind of an
infrastructure capable of reshaping our industries, the way
that we operate, accelerating scientific discovery, as Ms. Kak
talked about, transforming national security, and redefining
the global economy.
And, once again, I think we stand at the forefront. I think
it was mentioned earlier that we have a competitive edge now,
but it is not guaranteed that we would have that competitive
edge in the future.
And so it is incumbent upon us in this committee and this
Congress to understand that framework and to make sure that we
maintain and enhance that competitive edge.
Mr. Heather, we have heard a lot today about the EU, and I
think, as was mentioned by Mr. Thierer, about the Brussels
Effect.
What do you think--in your opinion, where do you think that
they went wrong in their regulations specifically, and what
lessons can we learn from their mistakes so that we don't
repeat them here?
Mr. Heather. So as I said in my testimony, I think Europe
prides itself in its kind of rush to regulate and wants to be
the first to market to regulate, and I think they use that as
kind of soft power and try to go around to the rest of the
world and get them to emulate it.
And I think one of the things that they don't do a very
good job is, one, sitting back and evaluating how their
existing laws are working and functioning and identifying where
the gaps are in those laws and where they might need to fill in
those gaps with regulation. And so they didn't do that in their
process to create the EU AI Act.
The other thing they did was, because of this precautionary
principle--which is kind of a philosophy they have to get out
ahead and prevent any future harms even as they may not even be
real, they may only be theoretical--they decide that they want
to classify lots of AI applications as being high risk. So they
have overclassified what AI applications are high risk.
And I hear a lot of people here talk about Big Tech. When I
listen to Mr. Bhargava speak about what AI could do for nurses
to make their jobs easier, when I hear about how it can improve
accounting functions, when I hear about what it can do to make
call centers work easier for consumers--none of that is Big
Tech. Those are going to be companies who are going to be
deploying AI technologies that are being built, not by Big Tech
companies but by medium-size companies and small-size
companies.
So there is a lot of focus here on Big Tech, and Big Tech
is certainly a key piece to the ecosystem here. They are
obviously critical on the infrastructure side of the work that
supports AI development. But the actual deployment of AI
algorithms that are going to be used, they are going to be used
by businesses doing B2B work, not just B2C work, and the idea
that we have kind of put this EU model in place in Europe is
going to really hold Europe back from being competitive around
the world.
Mr. Fry. Do you think that we are at risk of creating a
permission culture, if you will, where AI needs permission on
innovations, or prior approval, prior to--or compliance with
strict regulations? That seems to be the European model: You
need their permission in order to do something. Are we at risk
of doing that here?
Mr. Heather. I don't know that we are at risk of doing that
here yet, but that certainly is the path in which we see the
States walking down. Certainly I think that is the path that
Europe leans to.
Interestingly enough, when you listen to civil society
groups in Europe, their biggest criticism is actually the role
of AI being used by the government in Europe. There actually is
the ability to use AI technologies by European governments for
surveillance purposes and these kinds of things that are not
being disciplined by the EU AI Act.
And so I have heard lots of criticisms by the civil society
groups that essentially some AI technologies are going to be OK
for the government to use but not OK for commercial use. That
kind of disparity also, I think, creates problems and
challenges.
But those are some of the things that we see also out of
civil society groups in Europe.
Mr. Fry. Fair point.
Mr. Bhargava, on Monday The Wall Street Journal published
an article titled ``The Tech Industry Is Huge--and Europe's
Share of It Is Very Small,'' and it concludes that, quote, ``A
big reason why Europe is now behind can be summed up as a lack
of speed.''
Entrepreneurs like you and companies that you invest in are
slowed down by the maze of regulations in Europe--and even some
States--and according to a survey cited in the same article,
European businesses spend 40 percent of their IT budgets on
complying with regulations, which is astronomical to me.
In your view, what would happen if the U.S. adopted that
same approach or States adopted that same approach that they
have got in Europe?
Mr. Bhargava. Yes. I will take just the 3 seconds here.
But the models are changing every 3 to 6 months, so this is
an industry where you can't afford to fall behind. If you fall
behind even a matter of months, you are behind in a pretty
large way from a technology perspective. And so that is
something I hope the committee takes into account.
Mr. Fry. Thank you for that.
Mr. Chairman, I yield back.
Mr. Bilirakis. Thank you. Thank you, Mr. Fry.
Now I recognize my fellow Florida Gator--go Gators--Ms.
Lee. She is recognized for her 5 minutes of questioning.
Thank you. I had to get that in.I have got my tie on today.
Thank you.
Ms. Lee. It is a great day for the Gators in the Capitol
today.
Thank you, Mr. Chairman, and thank you to our witnesses for
being here today to help us shape a thoughtful, forward-looking
approach to AI policy.
Artificial intelligence is not just the technology of the
future, it is already transforming the way that we live, work,
and govern, and it is reshaping nearly every sector of our
economy. The question before us is not whether to act, it is
how to act wisely.
So as policymakers we have two responsibilities: One is to
protect the public from real risks; but, second, to ensure that
American innovation continues to lead the world. Those goals
are not mutually exclusive. In fact, the right policy framework
can achieve both.
So I appreciate you all being here today to help us strike
that balance.
I would like to begin, Mr. Bhargava, to pick up on one of
the elements in your testimony about policy frameworks, and
specifically this: What is your view on requiring AI developers
to use standardized documentation tools, like model cards, to
disclose purpose and limitations and training data?
Mr. Bhargava. Yes. Absolutely.
So the model card concept I think was originated by Google,
which created the Transformer paper and has been involved in
the space as well.
I think those sort of rules, frameworks, are actually very
helpful, and it is also great that they are coming from
industry. They are coming from people who are in the weeds,
building the models, testing the models, and can have insights
that really make sense.
So the four general areas where I think there could be
frameworks created, and I would love to work with Congress on
it, is, one, looking how you gather data. So there can be ways
to disclose and have the transparency that my colleague here
talked about to gather data.
The second is evaluating how models are trained and having
folks kind of report the framework around that.
The third is the outputs and testing of models. So this is
both actually algorithmic testing, but also human testing. So
you could have different AI models testing each other from
third parties, for example. This would save costs and be an
easy way to create a framework or guideline. And, in addition,
I think always we will need humans in the loop as well.
And then fourth, having companies, including startups,
write up what are the downstream effects of their technology.
Really showing their thoughtfulness.
So everything I am recommending here are things we do at
General Catalyst, a 200-person or so company, it is things we
do at GC on all of our investments. So I do think there are
frameworks that can be put in place.
It is really important that--two points: that, one, the
framework is coming from the Federal Government, not the State
governments, and so it can be consistent and easy to
understand; and, two, the frameworks have to be developed with
industry. I think one of the things Europe has not done enough
of to date is creating these with the actual market
participants, with startups, with their entrepreneurs.
And so we would welcome having more discussions with
General Catalyst, GC Institute, to come up with responsible
frameworks but also ones that our startups can get behind.
Ms. Lee. What should policymakers be careful not to do when
designing transparency requirements, particularly for early-
stage or open-source developers?
Mr. Bhargava. They should make sure to do it with the
startups themselves and the companies. Really what we do not
want them to do is just create it in a vacuum, to throw in
whatever words sound good or beating up Big Tech, et cetera,
and just making a statement. Like, this is about actually
creating the right policy.
So I think talking with the startups, with the market
participants, with people in industry is really, really
important. It is not a political statement. We all want to come
to this framework. And getting the input from startups, I
think, would be extremely helpful in getting to the right
framework.
Mr. Lee. Getting back to that framework model card
disclosure concept, is it your view that those types of
disclosures should be voluntary, required for only certain
high-risk applications, or broadly mandated across the
industry?
Mr. Bhargava. I think they should required as long as it is
minimalistic.
So the requirements have to make sense. You can't ask for
these massive audits on a model, and then when our startups
comply not get back to them for 12 months because you don't
really know how to evaluate the material they sent you, for
example.
So I think these can be required frameworks on the Federal
level, but they have to make sense, and there has to be the
agency there as well and the people in government to be on the
other side having a conversation with what these frameworks
should be. It needs to be a real partnership approach, and it
needs to be simple.
Ms. Lee. Mr. Thierer, let me move to you. I would like to
get your thoughts on this.
Do you support directing NIST to develop voluntary AI
standards or best practices similar to what it did for
cybersecurity?
Mr. Thierer. Yes. And the good news, Congresswoman, is that
NIST has already done a lot of that heavy lifting. And this has
been a very bipartisan and widely agreed-to process, a
multistakeholder process, as it is called. A lot of different
players came together and formulated a really good set of
standards for AI risk management for cybersecurity privacy.
That is important work. And I think, obviously, Congress
can build on that and talk about how to go beyond that with
certain types of policies that were considered in this Congress
last session and will be considered again, I am sure.
Ms. Lee. Thank you, Mr. Chairman. I yield back.
Mr. Bilirakis. Thank you. I appreciate it very much.
Now I recognize Mr. Veasey for his 5 minutes of
questioning.
Oh, Ms. Clarke just walked in. OK.
Ms. Clarke, you are recognized for 5 minutes of
questioning.
Ms. Clarke. Thank you very much, Mr. Chairman.
We are all on roller skates today with so many hearings
taking place. So let me thank our witnesses for your expert
testimony here today, and thank our Ranking Member Schakowsky.
I am glad to see this subcommittee gather to discuss
regulations for artificial intelligence and the future of U.S.
leadership in this space. I am, however, a bit perplexed at the
timing.
It seems to me that we would have been better served having
this discussion before our Republican colleagues voted to
advance a 10-year moratorium on AI laws as a part of the Big
Beautiful Bill to line the pockets of their Big Tech
billionaire benefactors at the expense of Americans' health,
personal freedom, privacy, and safety online.
A 10-year moratorium seems wildly irresponsible given the
rapid pace of technological advancement, especially in the
field of artificial intelligence.
It is particularly disappointing to see such a provision
advance in light of this administration's consistent efforts to
undermine the few existing guardrails protecting consumers,
such as the illegal attempt to fire Democratic FTC
Commissioners, the attacks on our Federal workforce, and the
degradation of independent agencies' independence.
Further, while my colleagues across the aisle move forward
with this shortsighted moratorium, they have not taken any
meaningful steps to fill the vacuum this moratorium would leave
in its wake with commonsense, bipartisan legislation to protect
Americans' privacy and create a regulatory framework for
artificial intelligence in this country.
The age of artificial intelligence is upon us, and this
Republican-controlled Congress needs to step up to the plate.
We are well overdue for a comprehensive Federal data privacy
standard. We have not seen this committee take any steps this
Congress towards the bipartisanship required to do such
sweeping legislation, which would be foundational to any
overarching AI legislation.
And, fortunately, while Republicans have used their time in
power to quash any progress made on data privacy and artificial
intelligence, States across the country are stepping up to fill
the void and protect consumers.
Unless and until Congress acts, State laws are the only
recourse American consumers have for protecting themselves and
their data from Big Tech and the harms caused by artificial
intelligence.
While artificial intelligence offers exciting opportunity
and innovation, without the proper protections in place the
potential for harm is too great to ignore.
Ms. Kak, can you explain for this committee the importance
of a Federal data privacy in the larger policy discussions
around artificial intelligence?
Ms. Kak. Thank you, Ms. Clarke.
I wanted to first just agree with your characterization of
what is happening right now with this proposed moratorium,
which is that we are, you know, proposing to wipe the slate
clean at the State level without anything in its place, just
the reassurance that, you know, Congress will act and that
Federal rules will come, but a record that does not inspire
confidence.
So, on the question of a Federal privacy law, this is a
moment--and we have said this for a long time: Data privacy law
is the foundation of AI regulation, of AI law. AI is
supercharging already bad and corrupt incentives for unchecked
commercial surveillance, the kind of, you know, free-for-all
using AI collected in one context for another without asking
for permission, leaky chatbots that routinely are sort of
taking sensitive data on the one hand and leaking it out from
the other in accidental but routine ways.
You know, it is another area where I think we need to be
very grateful for the fact that States have sort of stepped up
to the plate. But I agree with you, we need a Federal floor,
particularly to set the terms on which data minimization
happens. Our personal data is not a free-for-all, and I think
this is the most--we are already seeing Big Tech companies use
AI as a free-for-all justification to, you know, proliferate
these kinds of bad practices.
Just very quickly, I wanted to also say that Federal
privacy law would also procompetitive effects. It would limit
what we are seeing, which is aggressive strategies for
acquiring companies, acquiring data sets, and shoring up Big
Tech advantage and shutting the door behind competitors. So
privacy would be a step in the right direction for consumers
but also for competition.
Ms. Clarke. Well said, Ms. Kak.
With that, I am going to yield back the balance of my time.
Mr. Bilirakis. The gentlelady yields back. Appreciate it.
I now recognize Mr. Evans--oh, is Mr. Kean here?
Oh, Mr. Kean. OK, Mr. Kean, I recognize you for your 5
minutes of questioning.
Mr. Kean. Thank you, Mr. Chairman, and thank you to our
witnesses for being here today.
Mr. Bhargava, in your view, what can we do to make Federal
AI policy futureproof, or at least future-resistant, to enable
innovation even if AI technology continues to progress?
Mr. Bhargava. Yes. I think having clear guidelines is the
best way to go.
The technology, as I mentioned before, continues to change,
so every 3 to 6 months models can do more and more. For
example, in last November-December, Google released Deep
Research. Then there were new logic reasoning models from
OpenAI, there were new models from Anthropic.
And so the models themselves and what they can do, they are
moving to be more agentic, they are moving to use voice. The
technology is changing very, very quickly, and it is hard to
keep up with. So I think creating these guidelines are what is
most important.
And what I mean by that, for example, is a transparency
guideline. So that could hit on what are the data sources, how
do we train the model, how do we test the model. Also having,
kind of, red teams come, and after there is an output in AI, a
red team comes and tries to make it do something bad. So this
is sort of a human testing of it.
So putting in place these processes and these guidelines
are the way to kind of have a framework on the national level
rather than try to get too into the weeds because the
technology is changing every 3 to 6 months.
And I think putting these guidelines in place and these
processes in place at a Federal level, with input from the
entrepreneurs and the founders, is the best way to have an
approach here.
Mr. Kean. And given your background as a startup founder
and venture capitalist, can you explain the practical impacts
that a patchwork of State regulations have on innovation?
Mr. Bhargava. Absolutely.
I, myself, am a founder. I started a company in the
digital-asset space which was then later acquired by Coinbase.
And there, you know, we had to operate across different States.
And so it was very hard for to us compete with a larger
company, because we didn't have the lawyers or the compliance
teams to be able to look from a State-by-State basis. It was
very hard to actually compete in that sense.
And so having a single national framework that is very
clear, that has input from startups, is a much better approach
just in general to innovation, not necessarily only specific to
AI. But, certainly, AI is top of mind. It is the fastest-moving
technology today.
And this idea of competing with China on AI, it is not just
AI, it is all the things AI enables. So it enables better
healthcare, it enables better transportation, folks were
talking about self-driving. And so this isn't about competing
in China in one place, this is competing in China in multiple
industries.
We absolutely need to stay ahead, and the only way to stay
ahead across all of these industries is to have clear,
transparent guidelines on the Federal level, with input from
startups and experts in the field, not simply being written by
think tanks or politicians or others.
Mr. Kean. OK.
And, Mr. Heather, the EU AI Act entered into force in
August 2024. As compliance deadlines approach, can you discuss
how the European Commission and the private sector are
implementing this law? And are there any concerns that we
should be aware of?
Mr. Heather. I would say, buckle up.
I don't know that the Europeans, similar to when they stood
up GDPR or when they stood up the DMA, the Digital Markets Act,
that they even know how to police the rules which they have
written. There are a lot of ambiguities. A lot of
determinations are going to have to be made in real time, but
the expectation is that the companies will be in compliance.
So this creates a morass for even the largest companies to
understand what the rules of the road actually are and makes
it, you know, virtually impossible for the small or medium-size
enterprises to be ready to be in compliance on day one.
Mr. Kean. Thank you.
And, Mr. Thierer, in your testimony, you discussed the use
of an AI moratorium for Congress on AI policy. Can you
elaborate on how this moratorium on State AI regulations would
work in practice? And is there a precedent for such a step?
Mr. Thierer. Yes, Congressman, indeed, I mentioned the
Internet Tax Freedom Act of 1998----
Mr. Kean. Uh-huh.
Mr. Thierer [continuing]. And there are other types of
moratoria that have been utilized by Congress to deal with
situations like this. It gives breathing room and a learning-
period moment when we can actually figure out what works.
It would basically be, as the current moratorium
stipulates, something that would cover most things having to do
with algorithmic models and automated decision-making systems,
but it would leave room for other types of general-purpose--
generally applicable laws, rather, that would cover technology
more broadly.
So the key thing here is technology neutrality----
Mr. Kean. Uh-huh.
Mr. Thierer [continuing]. And making sure that we don't
have this voluminous, overlapping set of patchworks from State
to State.
Mr. Kean. OK.
Thank you all for your testimony.
I yield back.
Mr. Bilirakis. The gentleman yields back.
Now I will recognize Mr. Veasey for his 5 minutes of
questioning.
Mr. Veasey. Mr. Chairman, thank you very much.
One of the things that I have been interested in and am
obviously concerned about--and I do think that there are some
benefits to it, but we have to be careful--is the facial-
recognition tool.
And, Mr. Chairman, I ask unanimous consent to insert this
article from The Washington Post, titled "Police secretly
monitored New Orleans with facial recognition cameras."
Mr. Bilirakis. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Veasey. Now, this article, which includes findings from
an investigation that the Post conducted for 2 years, talked
about how the New Orleans Police Department secretly relied on
facial-recognition technology operated by a private company to
scan streets in search of suspects, while the use of this
technology was inconsistent with a city ordinance that they
passed in 2022.
And given the limitations of facial-recognition
technology--and I had some issues--it seems to have been
cleared up now, but I had some issues with CLEAR, and so I
understand this, with the tool that is used for airports, to
get in and out of airports.
But given the limitations of facial-recognition technology,
we can only hope that New Orleans will investigate this
infraction of this ordinance and publicly disclose how many
people were subject to any sort of false arrest due to this
use.
And we are going to see more and more police departments
using this tool. I think that even where I am from, in Fort
Worth and Dallas, that they have adopted rules on the use of
facial recognition.
I wanted to ask Ms. Kak: If this 10-year moratorium on
State laws goes into effect, it is important to establish that
we have clear Federal regulations to govern the use of AI in
law enforcement. Do you agree with that?
Ms. Kak. Thank you, Representative.
I actually did want to call attention to the fact that we
have spent a lot of time at this hearing talking European law
and what it is and what it isn't, and maybe we all agree that
it isn't perfect, but, respectfully, I would really like to
ask, What does that have to do with State laws? Because I would
argue that they have nothing in common.
Where we are actually seeing States step up to the plate
and act out are on weeding out bad apples, putting in place
safeguards in the most high-impact settings, including criminal
justice, including immigration, including education, where
stakes are really high. And they are making sure that, you
know, we are not putting--that AI systems that have basic
inaccuracies aren't proliferating, particularly when the
impacts of these errors are on people's basic civil liberties.
So I agree with you. I think that, you know, States have
stepped up to the plate, they have responded to their
constituents, and this proposal would really wipe away a lot of
that progress, without anything in its place.
Mr. Veasey. What do you think that Congress can do to make
sure that these technologies are used ethically and that they
are being used the right way, without infringing on civil
liberties? What do you think this body should do?
Ms. Kak. We have a decade of evidence that, you know,
provides a very clear framework. And that begins with
transparency. It includes clear accountability so that firms
that using these systems need to go through proper vetting to
make sure that they work as they are intended to work, that
they don't sort of, you know, misidentify people.
You mentioned a personal example. The FTC cracked down
recently on Rite Aid's use of facial-recognition technology
that was routinely misidentifying people in grocery stores and,
sort of, subjecting them to unwarranted scrutiny from law
enforcement agencies.
So, yes, I think it is very clear what we need to do. The
problem has been one of political will to act in Congress.
Mr. Veasey. Right.
And I think, with all of these technologies, one of the
things, you know, that we have to take into consideration is,
like, we want to be the leaders in any sort of new technologies
that are coming to the market. We don't want the Chinese to be
the leaders in these areas.
What can we do in order to make sure that there is consumer
confidence in these areas of facial recognition and AI
technology as we move forward to make sure that civil liberties
are being met but to also make sure that anything that is being
deployed, that the U.S. is the leader on that?
Ms. Kak. Absolutely. I think we need to be incentivizing a
race to the top, not the bottom. And one thing that we can be
guaranteed will deter private investment is the proliferation
of snake-oil salesmen, of these kind of, sort of bad apples
that no one wants to be in business with.
And to be, you know, very candid, that is what States have
stepped up to the plate to do. It is essentially going after
the worst actors in the market and making sure that this is an
industry that inspires confidence, not one that is full of
scammers and snake-oil salesmen.
Mr. Veasey. Yes. No, that makes a lot of sense.
Thank you, Mr. Chairman. I yield back the balance of my
time.
Mr. Bilirakis. The gentleman yields back.
Now I will recognize the vice chairman from the great State
of Pennsylvania, Mr. Joyce--Dr. Joyce--for his 5 minutes of
questioning.
Mr. Joyce. Thank you, Chairman Bilirakis, and thank you for
our witnesses who have agreed to come here today to testify.
Every day, every hour, the development of artificial
intelligence is transforming the way that we consume
information, that physicians treat American patients, even how
we travel.
As the chair of the Privacy Working Group, it is clear to
me more than ever that we need a solution to the patchwork.
What do I mean by ``patchwork''? States are introducing AI laws
left and right, and it is our responsibility here at the
Federal level to ensure that businesses can continue to
innovate while complying with this patchwork of laws.
This is especially true when it comes to AI's involvement
in the healthcare field. AI has the ability to elevate the care
of American patients--the care that they expect, the care that
they deserve. But we must ensure that the physician-patient
relationship is not left behind.
Mr. Bhargava, I am interested in how innovative AI products
and services can improve the lives of my patients, improve the
lives of my constituents. Can you highlight some of the General
Catalyst investments in innovative American AI startups that
this committee should take note of as we consider AI
legislation?
Mr. Bhargava. Absolutely. And thank you for asking the
question.
Healthcare is a massive industry. It is even larger than
tech. And at General Catalyst we have invested in over 100
healthcare companies over the last decade or so, and so are one
of the, sort of, leading venture firms in this field.
One or two examples I could provide for you.
One is in AI scribing. So doctors and nurses spend a lot of
time taking notes and then doing manual data entry on those
notes. That can be automated with responsible AI systems and
software that also need to be HIPAA-compliant and have
responsible innovation. But that is one of the many tasks.
The second is, where there is a shortage of healthcare
workers, how do we get them to be AI-enabled? How do we get
them to get rid of the most menial tasks and be focused on the
harder parts? Which, many times, is chatting with patients,
relating to them, solving more difficult problems.
So we have many companies--Hippocratic, who is here in the
audience today, Commure, and others--who are tackling these
issues of how do we automate more and more so that our
healthcare providers can give better service by having these
AI-enabled tools assisting them.
And, as we back these companies, we can make sure that
there is the responsible innovation part. Healthcare is the
toughest place you really don't want to mess up. Out of every
industry, it has the most ramifications. So it is a good
example of both where there could be a ton of innovation and at
the end of the day consumers' lives can be saved, but also why
I would urge Congress to move faster this time than in the past
on creating a framework, because lives are at stake here as
well as our competitive advantage against China.
Mr. Joyce. As a physician, I clearly recognize that lives
can be at stake. Do you feel that the patchwork that currently
exists as far as AI legislation from the States puts patients'
lives at risk?
Mr. Bhargava. I don't believe it is preventing deaths or
that the patchwork is good for the companies that are operating
and are trying to make healthcare better.
I think we need a Federal solution instead. I think the
States don't really have the capacity to keep up with all of
the different AI innovations and technologies and models. And
then the startups themselves, it is very difficult for them to
act in a way where they are complying with all these many
States.
It would be much, much better to have a Federal-level
regulation that would then allow for this AI technology to
permeate even faster and to save more lives quickly.
Mr. Joyce. Thank you.
Mr. Heather, in many respects, AI is already regulated by
many sectoral laws that apply to non-AI products and services,
like the FDA's oversight of algorithms that healthcare
companies use in care, particularly when it comes to medical
devices.
Can you explain how the EU approached existing sectoral
laws, such as healthcare, before it passed the EU AI Act? Did
the EU find gaps in the current law that needed to be addressed
by their new legislation?
Mr. Heather. I am not aware that the EU identified any gaps
with regard to how medical devices or pharmaceuticals reach the
market where they have been somehow enhanced or built with AI
models.
And so I think this is a really important distinction when
people are talking about moratorium. There are rules on the
books. I heard the Congressman from Texas talk about
surveillance. I heard you also say that there is a city
ordinance in New Orleans that would have prohibited it. That
sounds to me like it is an enforcement issue, not an AI issue.
So I think we are thinking about products and services and
outcomes, not necessarily the technology that brought you that
product or service or outcome.
And so I think the ability to use existing laws and
regulations to enforce good, strong outcomes is not what this
conversation is about. It is about getting out ahead and trying
to discipline a technology that has lots of opportunity behind
it, in ways that will have unintended consequences to our
competition and competitiveness in the global economy.
Mr. Joyce. Mr. Heather, I thank you for the answer.
Mr. Chairman, my time has expired. I yield back.
Mr. Bilirakis. Thank you.
The good doctor yields back.
Now we will recognize Mr. Evans for his 5 minutes of
questioning.
Mr. Evans. Thank you, Chairman, Ranking Member.
Thank you, of course, to our witnesses from coming.
I am from Colorado, and last year we became the first State
in the country to enact a bill at the State level to regulate
AI. And I will read you a couple of quotes here.
``This law creates a complex compliance regime for all AI
developers and deployers doing business in Colorado.''
Another one: ``I am concerned about the impact this law may
have on an industry that is fueling critical technology
advancements across Colorado for consumers and enterprises
alike.''
And then, finally: ``Government regulation applied at the
State level in a patchwork across the country can have the
effect to tamper innovation and deter competition in an open
market.''
I agree with those statements. They actually came from my
Governor, Jared Polis, who signed Colorado's AI law and then
came out in support of the Federal moratorium that is being
discussed here today, among other things.
I voted against the law when I was in the State legislature
because I agreed with those statements, and I saw this as
dampening the ability to innovate and bring jobs to Colorado
and fostering that patchwork across the country.
So my first question, Mr. Thierer, is going to be to you.
Can you just expound on why the Colorado AI law and a patchwork
like it is so problematic and why Congress needs to be the one
to act to address this emerging patchwork of rules?
Mr. Thierer. Absolutely, Congressman. And thank you for
that question.
It seems that Governor Polis is having some buyer's remorse
from signing this bill, and his signing statement read more
like a veto statement, as you just indicated.
I think the reality is that they realized the complexity of
this law would create enormous burdens, and when they tried to
subsequently study it the way they should have been studying it
before it was passed, they realized they didn't have a lot of
the answers to complicated questions about exactly how we
define ``developer,'' ``deployer,'' ``integrator,''
``consequential decision,'' all of these things, or even the
term ``artificial intelligence,'' which is being defined
differently in different State bills.
If we can't even define the basic term we are here today to
discuss today at the State level, then that is a patchwork that
is going to create huge problems for small businesses.
Mr. Evans. Thank you.
Going to Mr. Heather, kind of following up on that train of
thought here, from the Chamber, do you have any data on either
the fiscal or the revenue impact that a patchwork of
contradictory State laws might have in this field?
And then, on the other side of that, do you have any fiscal
or revenue data on the benefits of having a national just
general-rules-of-the-road policy might have?
Mr. Heather. I don't know that I have data as it relates to
government expenditure. But I can tell you that, as it relates
to the private sector, as was mentioned I think before, there
is an estimate of 330,000 euro just to be able to comply with
an element of the EU AI Act.
To the degree that we have over 1,000 AI-related bills that
have been introduced in State legislatures or in local units of
government, to the degree that some of those make it across the
finish line, there is a compliance cost that will have to be
met by each company that wants to do business in those markets.
Because these laws are not necessarily enforced in the
United States, I don't know that there is good data out there
that shows what it is going to cost to comply for companies
with regard to the Colorado law. So I think we are very early
days in being able to get those cost estimates.
Mr. Evans. Thank you.
Do you think there is potentially additional revenue that
would be generated by industry and by business by having a just
general national rules of the road versus a patchwork of State
laws?
Mr. Heather. As I said in my testimony, I think there are
estimates that suggest that, you know, somewhere upwards of $16
trillion may be gained to the global economy by AI. All of that
will be taxed by governments.
So, to the degree to which we unleash AI technologies and
that allows us to increase our productivity as an economy, that
leads to growth. And whenever there is growth, there is tax-
revenue opportunity for the government.
Mr. Evans. Thank you.
In my final minute, Mr. Thierer, back to you.
Before this job, I spent 10 years as a police officer, and
so making sure that we take care of kids is critically
important to me. I would venture that I have probably arrested
more child abusers than anyone else in this room.
And so, as I am reading through the bill that is being
discussed today, I noticed that there were about three pages of
exceptions in that bill that allow for enforcement of a lot of
different things in the AI space. So it is not a complete
moratorium.
And so the question to you is, Given how the legislation is
written, can we still continue to keep kids safe?
Mr. Thierer. Absolutely. You can use technology-neutral
policies and approaches.
And I also just want to stress that, under the rule of
construction in this moratorium, it very clearly states that
the primary purpose, in effect, is to remove legal impediments
to facilitate the deployment or operation of AI systems.
This is about furthering the development of these systems
and not dealing with these things that we need to restrict on
the other side through generally applicable safety laws.
Mr. Evans. Thank you.
I yield back.
Mr. Bilirakis. Thank you very much, Mr. Evans.
OK. Very good. I think we are ready to finish up.
I want to thank the panel for being so patient and
answering all the questions.
And I will ask unanimous consent that the documents on the
staff list be submitted for the record.
Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Bilirakis. I remind Members that they have 10 business
days to submit questions for the record. And I ask the
witnesses to respond to the questions promptly. Members should
submit their questions by the close of business day on June
5th.
So, without objection, the subcommittee is adjourned.
[Whereupon, at 12:42 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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