OpenAI broke its silence on California's most controversial AI bill on Tuesday, publicly stating its opposition in a letter to California Sen. Scott Wiener and Governor Gavin Newsom. The AI giant argued that SB 1047 would stifle innovation and drive talent out of California, but Sen. Wiener quickly fired back, calling it “nonsensical.”
“The AI revolution is just beginning, and California's unique position as a global leader in AI powers our state's economic vitality,” OpenAI chief strategy officer Jason Kwon said in the letter obtained by TechCrunch. “SB 1047 would threaten that growth, slow the pace of innovation, and lead California's world-class engineers and entrepreneurs to leave the state in search of greater opportunities. Given these risks, we need to protect America's AI dominance not with state policy, but with a set of federal policies that provide clarity and certainty for AI labs and developers while also protecting public safety.”
The company on Tuesday joined a broader local opposition to SB 1047, adding its voice to those of industry groups representing Google and Meta, investment firm Andreessen Horowitz, prominent AI researchers and California Reps. Nancy Pelosi and Zoe Lofgren.
An OpenAI spokesperson said the company has been in discussions with Sen. Wiener's office about the bill for months, but Wiener said the AI lab's claims that SB 1047 would drive AI companies out of California are “fed up.”
He noted in a press release on Wednesday that OpenAI has not actually “criticized any provision of the bill.” He said the company's claim that SB 1047 will cause companies to leave California “makes no sense given that SB 1047 is not limited to companies headquartered in California.” As we previously reported, SB 1047 affects all AI model developers that operate in California and meet certain size criteria.
In other words, whether an AI company is based in San Jose or San Antonio, it will be subject to these restrictions if it allows Californians to use its products. (An example of a law with this kind of reach is the Illinois Biometric Information Privacy Act.)
However, Bloomberg reports that OpenAI has put discussions about expanding its San Francisco office on hold due to concerns about California's regulatory environment. OpenAI has had an office in San Francisco's Mission District for many years and recently moved to new offices in the city's Mission Bay neighborhood in a space formerly used by Uber.
OpenAI declined to comment further on the real estate discussions.
“Rather than criticize the actual content of the bill, OpenAI argues that this issue should be left to Congress,” Wiener said in a statement. “As I've said many times, I agree that ideally Congress should address this, but they have not, and I am skeptical that they will ever do so.” Tech companies have taken similar positions on privacy laws in the past, pushing for federal regulation despite knowing it would be slow to implement, and California eventually stepped up in that regard.
OpenAI has endorsed several federal bills to regulate AI models, one of which would authorize the National AI Safety Institute as a federal agency to set standards and guidelines for AI models. Broadly speaking, this is quite similar to what SB 1047's Frontier Models Commission is supposed to do.
The California Legislature has significantly amended SB 1047 in an attempt to get Governor Newsom to sign a less controversial AI bill, but has failed to convince Silicon Valley's most important AI labs that the bill is worthy of passage. SB 1047 is now on a final vote in the California Assembly and could reach Governor Newsom's desk by the end of this month. The Governor has not expressed his feelings on SB 1047, but if he signs it, it will likely face widespread backlash from the industry.