California’s Attorney General, Rob Bonta, has issued legal advisories emphasizing that existing state laws apply to the development and use of artificial intelligence . These advisories highlight the necessity for businesses to ensure their AI systems comply with consumer protection, civil rights, competition, and data privacy regulations. The advisories also underscore the importance of transparency, urging entities to disclose AI usage to consumers and ensure the reliability of their AI models through rigorous testing and validation. This move reflects a broader trend of increasing regulatory scrutiny over AI technologies, compelling companies to view AI compliance not merely as a legal obligation but as a strategic business priority.
The integration of AI into various business operations has been accelerating, with companies like JPMorgan Chase leading the charge. The banking giant has deployed a generative AI tool, LLM Suite, developed in collaboration with OpenAI, to over 200,000 employees. This tool assists in tasks ranging from client briefings to legal work and call center operations. Teresa Heitsenrether, JPMorgan’s Chief Data and Analytics Officer, emphasizes that AI is intended to augment human labor, not replace it. The bank is focusing on harnessing AI to process proprietary data, driving innovation and efficiency while integrating robust controls to ensure data privacy and proper usage.
Similarly, Vimeo has shifted its focus towards supporting a diverse clientele, from independent creators to large corporations, by providing a private, controlled video-sharing environment. CEO Philip Moyer highlights the company’s dedication to quality content and private distribution, reflecting a market demand for non-public, personalized video sharing. Moyer also notes the transformative impact of AI on video creation and distribution, enhancing human creativity rather than replacing it.
In the logistics sector, 3 Men Movers, a Texas-based moving company, has adopted AI technology to improve operational efficiency, enhance safety, and reduce liability. The company utilizes AI-enabled systems to monitor driver behavior and optimize delivery routes, leading to a 4.5% reduction in accidents within the first three months of implementation. CEO Jacky Fischer emphasizes the importance of thorough testing and maintaining transparency with employees regarding AI use, ensuring that AI supports human workers rather than replacing them.
The U.S. Securities and Exchange Commission has also underscored the necessity of transparent and precise AI-related disclosures in annual reports . Companies are advised to clearly define AI concepts, detail how AI impacts strategy and operations, describe AI-related research and development, assess AI’s impact on competitive positioning, address emerging AI regulations, disclose associated risks, and consider AI’s impact on corporate governance and human capital. These steps aim to ensure regulatory compliance and provide investors with clear insights into the benefits and risks of AI use in businesses.
The increasing regulatory focus on AI is prompting companies to adopt proactive compliance strategies. A patchwork of emerging AI rules is raising compliance risks, necessitating a strategic approach to managing these new challenges. Businesses are encouraged to align their AI practices with legal, ethical, and regulatory standards, ensuring that AI remains a tool that enhances human capabilities rather than a source of legal and ethical complications.
In response to California’s new AI laws, which set regulations for AI use across various industries, companies operating in the state must act swiftly to implement appropriate compliance controls. These laws, effective from January 2025, aim to protect consumers and strengthen data privacy measures, potentially setting a precedent for other states. The legislation emphasizes the need for transparency, requiring AI companies to disclose detailed information about the data used to train their generative models, thereby addressing the “black box” problem associated with AI decision-making processes.
The California Attorney General’s advisories also highlight the applicability of existing laws to AI, including those related to consumer protection, unfair and fraudulent business practices, competition, discrimination and bias, and data privacy. Businesses are reminded of their obligations under laws such as the California Consumer Privacy Act of 2018 and the California Invasion of Privacy Act, among others. These advisories serve as a reminder that while AI technologies are evolving rapidly, they are still subject to the state’s robust legal framework designed to protect consumers and ensure fair business practices.
