US Senator Cruz proposes AI "sandbox" to lift regulations

By Jody Godoy

(Reuters) - Republican U.S. Senator Ted Cruz introduced a bill on Wednesday that would let artificial intelligence companies apply for exemptions to federal regulation to help them experiment in developing new technology.

Cruz leads the Senate Commerce Committee, which is scheduled to hold a subcommittee hearing on Wednesday about ways Congress can lower regulatory hurdles for the tech industry to give U.S. companies a boost in competing with China.

"A regulatory sandbox is not a free pass. People creating or using AI still have to follow the same laws as everyone else," Cruz said at the hearing.

If passed by Congress, the bill would allow agencies that oversee federal regulations to consider applications from companies to be exempt from regulations for two years at a time, and require companies to outline the potential safety and financial risks and how they would mitigate them.

Consumer rights advocacy group Public Citizen raised concerns about provisions in the proposal that would allow the White House's Office of Science and Technology Policy to override decisions by agency heads, and said the proposal "treats Americans as test subjects."

"The sob stories of AI companies being ‘held back’ by regulation are simply not true and the record company valuations show it," said J.B. Branch, Public Citizen’s Big Tech accountability advocate.

Cruz's sandbox bill does not include a ban on state regulation, something that the tech industry has sought and the White House has said is necessary to boost innovation. A bid to put a ban in place as part of President Donald Trump's tax-and-spending bill was defeated in the Senate on a 99-1 vote in July.

OSTP Director Michael Kratsios said at the hearing that Congress should reconsider the issue.

"It's something that my office wants to work very closely with you on," he told Cruz at the hearing.

(Reporting by Jody Godoy in New York; Editing by Franklin Paul and David Gregorio)