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August Gweon

August Gweon counsels national and multinational companies on data privacy, cybersecurity, antitrust, and technology policy issues, including issues related to artificial intelligence and other emerging technologies. August leverages his experiences in AI and technology policy to help clients understand complex technology developments, risks, and policy trends.

August regularly provides advice to clients on privacy and competition frameworks and AI regulations, with an increasing focus on U.S. state AI legislative developments and trends related to synthetic content, automated decision-making, and generative AI. He also assists clients in assessing federal and state privacy regulations like the California Privacy Rights Act, responding to government inquiries and investigations, and engaging in public policy discussions and rulemaking processes.

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This quarterly update highlights key legislative, regulatory, and litigation developments in the third quarter of 2024 related to artificial intelligence (“AI”) and connected and automated vehicles (“CAVs”).  As noted below, some of these developments provide industry with the opportunity for participation and comment.

I.      Artificial Intelligence

Federal Legislative Developments

There continued to be strong bipartisan interest in passing federal legislation related to AI.  While it has been challenging to pass legislation through this Congress, there remains the possibility that one or more of the more targeted bills that have bipartisan support and Committee approval could advance during the lame duck period.

  • Senate Commerce, Science, and Transportation Committee: Lawmakers in the Senate Commerce, Science, and Transportation Committee moved forward with nearly a dozen AI-related bills, including legislation focused on developing voluntary technical guidelines for AI systems and establishing AI testing and risk assessment frameworks. 
    • In July, the Committee voted to advance the Validation and Evaluation for Trustworthy (VET) Artificial Intelligence Act (S.4769), which was introduced by Senators John Hickenlooper (D-CO) and Shelley Moore Capito (R-WV).  The Act would require the National Institute of Standards and Technology (“NIST”) to develop voluntary guidelines and specifications for internal and external assurances of AI systems, in collaboration with public and private sector organizations. 
    • In August, the Promoting United States Leadership in Standards Act of 2024 (S.3849) was placed on the Senate legislative calendar after advancing out of the Committee in July.  Introduced in February 2024 by Senators Mark Warner (D-VA) and Marsha Blackburn (R-TN), the Act would require NIST to support U.S. involvement in the development of AI technical standards through briefings, pilot programs, and other activities.  
    • In July, the Future of Artificial Intelligence Innovation Act of 2024 (S.4178)— introduced in April by Senators Maria Cantwell (D-CA), Todd Young (R-IN), John Hickenlooper (D-CO), and Marsha Blackburn (R-TN)—was ordered to be reported out of the Committee and gained three additional co-sponsors: Senators Roger F. Wicker (R-MS), Ben Ray Lujan (D-NM), and Kyrsten Sinema (I-AZ).  The Act would codify the AI Safety Institute, which would be required to develop voluntary guidelines and standards for promoting AI innovation through public-private partnerships and international alliances.  
    • In July, the Artificial Intelligence Research, Innovation, and Accountability Act of 2023 (S.3312), passed out of the Committee, as amended.  Introduced in November 2023 by Senators John Thune (R-SD), Amy Klobuchar (D-MN), Roger Wicker (R-MS), John Hickenlooper (D-CO), Ben Ray Lujan (D-NM), and Shelley Moore Capito (R-WV), the Act would establish a comprehensive regulatory framework for “high-impact” AI systems, including testing and evaluation standards, risk assessment requirements, and transparency report requirements.  The Act would also require NIST to develop sector-specific recommendations for agency oversight of high-impact AI, and to research and develop means for distinguishing between content created by humans and AI systems.
  • Senate Homeland Security and Governmental Affairs Committee:  In July, the Senate Homeland Security Committee voted to advance the PREPARED for AI Act (S.4495).  Introduced in June by Senators Gary Peters (D-MI) and Thomas Tillis (R-NC), the Act would establish a risk-based framework for the procurement and use of AI by federal agencies and create a Chief AI Officers Council and agency AI Governance Board to ensure that federal agencies benefit from advancements in AI.
  • National Defense Authorization Act for Fiscal Year 2025:  In August, Senators Gary Peters (D-MI) and Mike Braun (R-IN) proposed an amendment (S.Amdt.3232) to the National Defense Authorization Act for Fiscal Year 2025 (S.4638) (“NDAA”).  The amendment would add the Transparent Automated Governance Act and the AI Leadership Training Act to the NDAA.  The Transparent Automated Governance Act would require the Office of Management and Budget (“OMB”) to issue guidance to agencies to implement transparency practices relating to the use of AI and other automated systems.  The AI Leadership Training Act would require OMB to establish a training program for federal procurement officials on the operational benefits and privacy risks of AI.  The Act would also require the Office of Personnel Management (“OPM”) to establish a training program on AI for federal management officials and supervisors.   

Continue Reading U.S. Tech Legislative, Regulatory & Litigation Update – Third Quarter 2024

This is part of an ongoing series of Covington blogs on the implementation of Executive Order No. 14110 on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” (the “AI EO”), issued by President Biden on October 30, 2023.  The first blog summarized the AI EO’s key provisions and…

Continue Reading October 2024 Developments Under President Biden’s AI Executive Order

On October 28, Texas State Representative Giovanni Capriglione (R-Tarrant County) released a draft of the Texas Responsible AI Governance Act (“TRAIGA”), after nearly a year collecting input from industry stakeholders.  Representative Capriglione, who authored Texas’s Data Privacy and Security Act (discussed here) and currently co-chairs the state’s AI Advisory Council, appears likely to introduce TRAIGA in the upcoming legislative session scheduled to begin on January 14, 2025.  Modeled after the Colorado AI Act (SB 205) (discussed here) and the EU AI Act, TRAIGA would establish obligations for developers, deployers, and distributors of “high-risk AI systems.”  Additionally, TRAIGA would establish an “AI Regulatory Sandbox Program” for participating AI developers to test AI systems under a statutory exemption.

Although a number of states have expressed significant interest in AI regulation, if passed, Texas would become the second state to enact industry-agnostic, risk-based AI legislation, following the passage of the Colorado AI Act in May.  There is significant activity in other states as well, as the California Privacy Protection Agency considers rules that would apply to certain automated decision and AI systems, and other states are expected to introduce AI legislation in the new session.  In addition to its requirements for high-risk AI and its AI sandbox program, TRAIGA would amend Texas’s Data Privacy and Security Act to incorporate AI-specific provisions and would provide for an AI workforce grant program and a new “AI Council” to provide advisory opinions and guidance on AI.

Despite these similarities, however, a number of provisions in the 41-page draft of TRAIGA would differ from the Colorado AI Act:

Lower Thresholds for “High-Risk AI.”  Although TRAIGA takes a risk-based approach to regulation by focusing requirements on AI systems that present heightened risks to individuals, the scope of TRAIGA’s high-risk AI systems would be arguably broader than the Colorado AI Act.  First, TRAIGA would apply to systems that are a “contributing factor” in consequential decisions, not those that only constitute a “substantial factor” in consequential decisions, as contemplated by the Colorado AI Act.  Additionally, TRAIGA would define “consequential decision” more broadly than the Colorado AI Act, to include decisions that affect consumers’ access to, cost of, or terms of, for example, transportation services, criminal case assessments, and electricity services.Continue Reading Texas Legislature to Consider Sweeping AI Legislation in 2025

In the past several months, two state courts in the District of Columbia and California decided motions to dismiss in cases alleging that the use of certain revenue management software violated state antitrust laws in the residential property rental management and health insurance industries.  In both industries, parallel class actions…

Continue Reading State Courts Dismiss Claims Involving the Use of Revenue Management Software in Residential Rental and Health Insurance Industries

On August 29, California lawmakers passed the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act (SB 1047), marking yet another major development in states’ efforts to regulate AI.  The legislation, which draws on concepts from the White House’s 2023 AI Executive Order (“AI EO”), follows months of high-profile debate and amendments and would establish an expansive AI safety and security regime for developers of “covered models.”  Governor Gavin Newsom (D) has until September 30 to sign or veto the bill. 

If signed into law, SB 1047 would join Colorado’s SB 205—the landmark AI anti-discrimination law passed in May and covered here—as another de facto standard for AI legislation in the United States in the absence of congressional action.  In contrast to Colorado SB 205’s focus on algorithmic discrimination risks for consumers, however, SB 1047 would address AI models that are technically capable of causing or materially enabling “critical harms” to public safety. 

Covered Models.  SB 1047 establishes a two-part definition of “covered models” subject to its safety and security requirements.  First, prior to January 1, 2027, covered models are defined as AI models trained using a quantity of computing power that is both greater 1026 floating-point operations per second (“FLOPS”) and valued at more than $100 million.  This computing threshold mirrors the AI EO’s threshold for dual-use foundation models subject to red-team testing and reporting requirements; the financial valuation threshold is designed to exclude models developed by small companies.  Similar to the Commerce Department’s discretion to adjust the AI EO’s computing threshold, California’s Government Operations Agency (“GovOps”) may adjust SB 1047’s computing threshold after January 1, 2027.  By contrast, GovOps may not adjust the valuation threshold, which is indexed to inflation and must be “reasonably assessed” by the developer “using the average market prices of cloud compute at the start of training.”Continue Reading California Legislature Passes Landmark AI Safety Legislation

In late August, the California legislature passed two bills that would limit the creation or use of “digital replicas,” making California the latest state to seek new protections for performers, artists, and other employees in response to the rise of AI-generated content.  These state efforts come as Congress considers the…

Continue Reading California Passes Digital Replica Legislation as Congress Considers Federal Approach

With Congress in summer recess and state legislative sessions waning, the Biden Administration continues to implement its October 2023 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (“EO”).  On July 26, the White House announced a series of federal agency actions under the EO…

Continue Reading Federal Agencies Continue Implementation of AI Executive Order

This quarterly update highlights key legislative, regulatory, and litigation developments in the second quarter of 2024 related to artificial intelligence (“AI”), connected and automated vehicles (“CAVs”), and data privacy and cybersecurity. 

I. Artificial Intelligence

Federal Legislative Developments

  • Impact Assessments: The American Privacy Rights Act of 2024 (H.R. 8818, hereinafter “APRA”) was formally introduced in the House by Representative Cathy McMorris Rodgers (R-WA) on June 25, 2024.  Notably, while previous drafts of the APRA, including the May 21 revised draft, would have required algorithm impact assessments, the introduced version no longer has the “Civil Rights and Algorithms” section that contained these requirements.
  • Disclosures: In April, Representative Adam Schiff (D-CA) introduced the Generative AI Copyright Disclosure Act of 2024 (H.R. 7913).  The Act would require persons that create a training dataset that is used to build a generative AI system to provide notice to the Register of Copyrights containing a “sufficiently detailed summary” of any copyrighted works used in the training dataset and the URL for such training dataset, if the dataset is publicly available.  The Act would require the Register to issue regulations to implement the notice requirements and to maintain a publicly available online database that contains each notice filed.
  • Public Awareness and Toolkits: Certain legislative proposals focused on increasing public awareness of AI and its benefits and risks.  For example, Senator Todd Young (R-IN) introduced the Artificial Intelligence Public Awareness and Education Campaign Act (S. 4596), which would require the Secretary of Commerce, in coordination with other agencies, to carry out a public awareness campaign that provides information regarding the benefits and risks of AI in the daily lives of individuals.  Senator Edward Markey (D-MA) introduced the Social Media and AI Resiliency Toolkits in Schools Act (S. 4614), which would require the Department of Education and the federal Department of Health and Human Services to develop toolkits to inform students, educators, parents, and others on how AI and social media may impact student mental health.
  • Senate AI Working Group Releases AI Roadmap: On May 15, the Bipartisan Senate AI Working Group published a roadmap for AI policy in the United States (the “AI Roadmap”).  The AI Roadmap encourages committees to conduct further research on specific issues relating to AI, such as “AI and the Workforce” and “High Impact Uses for AI.”  It states that existing laws (concerning, e.g., consumer protection, civil rights) “need to consistently and effectively apply to AI systems and their developers, deployers, and users” and raises concerns about AI “black boxes.”  The AI Roadmap also addresses the need for best practices and the importance of having a human in the loop for certain high impact automated tasks.

Continue Reading U.S. Tech Legislative, Regulatory & Litigation Update – Second Quarter 2024

With most state legislative sessions across the country adjourned or winding down without enacting significant artificial intelligence legislation, Colorado and California continue their steady drive to adopt comprehensive legislation regulating the development and deployment of AI systems. 

Colorado

Although Colorado’s AI law (SB 205), which Governor Jared Polis (D) signed into law in May, does not take effect until February 1, 2026, lawmakers have already begun a process for refining the nation’s first comprehensive AI law.  As we described here, the new law will require developers and deployers of “high-risk” AI systems to comply with certain requirements in order to mitigate risks of algorithmic discrimination. 

On June 13, Governor Polis, Attorney General Phil Weiser (D), and Senate Majority Leader Robert Rodriguez (D) issued a public letter announcing a “process to revise” the new law before it even takes effect, and “minimize unintended consequences associated with its implementation.”  The revision process will address concerns that the high cost of compliance will adversely affect “home grown businesses” in Colorado, including through “barriers to growth and product development, job losses, and a diminished capacity to raise capital.”

The letter proposes “a handful of specific areas” for revision, including:

  • Refining SB 205’s definition of AI systems to focus on “the most high-risk systems” in order to align with federal measures and frameworks in states with substantial technology sectors.  This goal aligns with the officials’ call for “harmony across any regulatory framework adopted by states” to “limit the burden associated with a multi-state compliance scheme that deters investment and hamstrings small technology firms.”  The officials add that they “remain open to delays in the implementation” of the new law “to ensure such harmonization.”  
  • Narrowing SB 205’s requirements to focus on developers of high-risk systems and avoid regulating “small companies that may deploy AI within third-party software that they use in the ordinary course of business.”  This goal addresses concerns of Colorado businesses that the new law could “inadvertently impose prohibitively high costs” on AI deployers.
  • Shifting from a “proactive disclosure regime” to a “traditional enforcement regime managed by the Attorney General investigating matters after the fact.”  This goal also focuses on protecting Colorado’s small businesses from prohibitively high costs that could deter investment and hamper Colorado’s technology sector.

Continue Reading Colorado and California Continue to Refine AI Legislation as Legislative Sessions Wane