The Battle Over Big Tech Will Be Won Or Lost in the States
Tech corporations are pouring money into state lobbying and elections.
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Over the last few weeks, dueling federal Super PACs have been having an ad and press battle. One, created by two tech industry titans, is backing federal candidates who will pledge to turn the artificial intelligence industry into a regulation-free Wild West. Another, formed by two former congressmen, aims to support candidates interested in reining in the big tech and AI industries (which are increasingly one and the same).
Super PACs can raise and spend unlimited, undisclosed funds on elections, thanks to the Supreme Court’s Citizens United decision in 2010. The first ads aired by the anti-regulatory side received a glowing write-up in CNN on Wednesday. And this is all happening in the midst of an ongoing debate over whether Congress can or should override state-level AI rules and regulations, as I’ve been covering.
But the perhaps more impactful news is running under the surface. The first PAC mentioned above, called Leading the Future, is also planning to engage in state-level races. Meanwhile, Meta (the parent corporation of Facebook) formed a Super PAC aimed explicitly at fending off state-level AI regulations. The tech giant’s leadership said it will spend “tens of millions” on state-level elections through the PAC, supporting candidates who won’t regulate dominant tech firms.
At the same time, a spike in lobbying spending from the tech industry occurred in both California and New York, particularly in the second half of this year, where some of the most ambitious tech-related regulations were proposed.
So while it’s always the federal government that gains the lion’s share of the attention and the money, it’s clear that today’s tech titans know a battle over AI and the other corrosive effects of Big Tech at the state level is inevitable.
And they’re right: On AI safety and job loss, the amount of public resources taxpayers will plow into an AI expansion, and whether and how AI firms can steal from artists and writers to fuel their models — as well as the role social media plays in our lives — it is, I’d argue, likelier that states lead the way than the federal government.
This year alone, more than 1,000 bills touching on AI were introduced at the state level, and that number will likely increase next year. While the federal government has dithered, the most ambitious tech and AI-related laws have come from the states, including: Colorado’s law to require AI model safety checks, New York’s law to ban algorithmic social media feeds and targeted advertising to children, Utah’s rules for age requirements on App Store access, Nevada’s ban on the use of AI bots for therapy, or California’s rules governing algorithmic price-setting. (Not that I think all of those are perfect, by any means.)
It’s also in the states where the most intense battles over AI-related data centers are occurring, as it’s from state governments that data center operators receive their tax breaks and from state utility commissions that they receive permission and payment structures for the power and water they use.
States are also leading on preventing AI firms from ripping off creators such as authors and musicians, preventing the deployment of AI slop in elections, and on regulating the use of personal data to set consumer prices, i.e. surveillance pricing.
It’s worth remembering that most state legislatures are part-time, with legislators having very little in terms of resources or staff, and that they’re constitutionally required in nearly every case to approve a balanced budget every year or two, in addition to all the other legislation they consider. Given those constraints, the amount of action that’s occurred is even more impressive.
The flood of tech money into state lobbying and elections, then, will have a few effects. It will inevitably cow some legislators who would maybe be sympathetic to some regulatory work to simply look the other way and spend their time on something else.
It will also, more insidiously, lead to the introduction of tech reform bills that are reform in name only, written by the industry as a way to head off anything that would be meaningful, introduced by legislators who want the political benefit of being perceived as “doing something” on tech while also accepting tech industry money. This has already happened on some subjects, with tech industry-approved bills on kids safety and surveillance pricing being introduced in multiple states.
And, of course, it will result in more tech lobbyists floating around state capitols, doing the subtle work of tipping bills in their favor and schmoozing lawmakers into thinking all of their districts will become the next Silicon Valley if they simply refrain from regulating the communications children can have with AI chatbots.
This will all be especially true if the bipartisan coalition fending off preemption holds. But even if preemption happens in some way, there will be court challenges, and creative efforts to get around it; there’s simply too much potential political benefit for every ambitious state-level politico to simply shrug and give up.
Indeed, the polling continues to show that voters are more fearful of AIs downsides than they are excited about whatever benefits it might bring, so there’s political capital to be built by leading on AI, reining in data center development, and ensuring that dystopian pricing schemes don’t become the de facto way in which we all shop. And since states don’t have the sort of minority-empowering measures that the federal government does, such as the silent filibuster, they can move much more quickly to address pressing political issues.
I would put my money, then, on efforts at the federal level continuing to fizzle until the states are so thoroughly ahead that the feds are embarrassed into catching up. And by that point we’ll know what sort of stuff is politically viable and what isn’t, and what sort of standards work and which don’t.
So remember, even if the headlines don’t reflect it, the states are where the battle over big tech and AI will really be won or lost.
SIMPLY STATED: Here are links to a few stories that caught my eye this week.
Texas is the first state to buy the cryptocurrency Bitcoin with state funds. (Read background on this issue here.)
Seven Democratic state attorneys general are investigating a set of lenders who offer “buy now, pay later” products.
Hosting the World Cup this summer could cost U.S. cities upward of $250 million collectively.
A bipartisan group of seven state attorneys general are advising their state universities not to follow the “cartoonishly villainous” College Sports Commission, which the NCAA has tasked with overseeing student-athlete compensation.
Legislators in eight states this year introduced bills to mandate disclosure of data center water use.
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— Pat Garofalo