AI Regulation

A bipartisan super PAC, “Leading the Future,” backed by AI industry figures, is targeting NY Assemblymember Alex Bores, a Democrat running for Congress. The PAC opposes Bores’ AI safety regulations, particularly the RAISE Act, arguing it could hinder U.S. competitiveness. The PAC advocates for a national AI framework instead of state-level laws. Bores defends his stance, emphasizing the need for informed regulation. The clash highlights the debate over AI governance, balancing innovation and risk mitigation. The PAC plans to expand its operations nationwide to influence AI policy.

This report summarizes five key market stories. First, AI startup Anthropic is navigating regulatory debates, facing criticism over its stance on AI legislation. Second, Netflix’s Q3 earnings missed estimates due to a tax dispute, but it’s expanding into merchandise. Third, Warner Bros. Discovery indicates potential sale amid restructuring and streaming price hikes. Fourth, consumers are experiencing “discount burnout,” impacting Black Friday expectations. Finally, Jana Partners partnered with Travis Kelce to acquire a stake in Six Flags, aiming to enhance shareholder value and guest experience.

Over 850 experts, including AI pioneers and tech leaders, signed a statement urging a pause on “superintelligence” development, citing societal risks like economic disruption and even human extinction. They advocate for public consensus and scientific proof of safety before proceeding. The debate reveals a growing divide between AI proponents and those demanding regulation, reflecting concerns over control, alignment, and potential unintended consequences of AI surpassing human intellect. Even figures leading AI companies have expressed anxieties about the perils of superintelligence. A survey indicates public support for cautious, regulated AI development.

This week’s market narratives include: scrutiny of regional banks like Zions due to NDFI loan concerns, reminiscent of the SVB collapse; an AWS outage disrupting services like Disney+ and impacting airlines; contrasting views on AI regulation between Anthropic and OpenAI; auto industry navigating inflation and supply chain issues ahead of key earnings reports; and a resurgence of “vintage” appeal among young consumers, boosting trading card and retro apparel sales, exemplified by Gildan’s Comfort Colors’ growth.

AI startup Anthropic faces increased scrutiny from the U.S. government amidst competition with OpenAI. David Sacks, Trump’s AI czar, accuses Anthropic of promoting a regulatory framework aligned with “the Left’s vision,” criticizing their safety-focused approach as “fear-mongering.” This contrasts with OpenAI’s close ties to the White House. Anthropic, founded by former OpenAI employees prioritizing AI safety, advocates for stricter regulation, differing from OpenAI’s lighter touch preference. Despite tensions, Anthropic holds government contracts and maintains its commitment to safety.

Amid rising AI concerns, states are enacting regulations, prompting Senator Blackburn to urge federal preemption. California’s recent AI measures, including chatbot safeguards, contrast with vetoed stricter conditions. Blackburn calls for federal action, citing the inability to pass preemptive legislation on children’s online safety due to tech company resistance. She advocates for comprehensive consumer privacy, data protection against LLMs, and safeguards against unauthorized AI use of personal likeness, emphasizing adaptable regulations focused on “end-use utilizations” reflecting fast AI changes. Parental concerns over AI’s impact on children are also rising.

California enacted legislation aimed at protecting children online, addressing concerns about AI chatbots, social media, and digitally altered content. SB 243 requires AI chatbots to disclose their AI nature and prompt minor users to take breaks. AB 56 mandates social media platforms to display mental health risk warnings, while AB 621 increases penalties for deepfake pornography. AB 1043 requires age verification tools in app stores. The laws necessitate changes in tech business models and align with a global trend toward greater AI regulation.

Google’s Kent Walker urged the EU to adopt a more strategic regulatory approach to AI to effectively compete globally, especially with China. He cited China’s high AI adoption rates compared to the EU’s lower rates, attributing this to significant government investment and less burdensome regulations. Walker proposed a three-pronged strategy: smart policy focused on real-world AI effects, workforce development for AI skills, and scaling up beyond basic applications to embrace scientific breakthroughs. He emphasized removing regulatory hurdles, fostering research, and broadly implementing AI to stimulate EU growth.

AI adoption in marketing is widespread (92%), but a study reveals a growing trust gap between marketers and consumers regarding personal data usage. While AI accelerates campaigns and boosts engagement, 63% of consumers distrust its data handling. New regulations like the EU AI Act are prompting ethical revisions. Retailers are urged to demonstrate AI’s value by simplifying shopping, ensuring transparency, and enriching customer experiences. Success stories emphasize using AI to solve tangible customer problems and fuel human creativity. Marketers plan increased AI investment, focusing on bridging the perception gap.

A recent report reveals that 81% of UK CISOs believe AI chatbots like DeepSeek require urgent government regulation due to cybersecurity risks. 34% have already banned AI tools, and 30% halted specific deployments over escalating concerns. CISOs fear data exposure, weaponization by cybercriminals, and increased attacks. 42% now view AI as a greater threat than a help. Many feel unprepared to manage AI-driven threats, prompting investment in AI specialists and C-suite training while urging for a national regulatory framework.