Opinion: What the federal government can learn from the Mountain West in AI regulation

Yahoo

21-02-2025

With artificial intelligence development accelerating, states have been racing to fill a perceived regulatory void. Without a federal framework to show the way, many states have defaulted to the European Union's AI Act as a blueprint for risk-averse AI governance. That heavy-handed approach would be a mistake. As the federal government decides whether to draft a preemptive framework, it should look to the Mountain West as an example.
Two states have proposed policies that put consumers in control of their AI-powered futures. Utah passed its AI Policy Act in March 2024, and Montana is in the preliminary stages of its Right to Compute Act. Both approaches focus on providing greater freedoms and benefits to consumers than more precautionary methods in other states.
The Utah AI Policy Act is simple. First, it establishes that businesses using AI in their operations cannot blame AI for causing consumer harm. Second, Utah established a regulatory sandbox where developers can roll out new AI products in a controlled environment. Developers are regulated but sheltered from ambiguities in the law while they stress-test their products before full deployment. These two provisions synergize well and give space to innovate while protecting consumers from harm.
Prosecuting bad-acting businesses — not AI or its developers — for real harm done to consumers is a better approach to risk mitigation. This precedent already exists in law and prevents using any tool as a scapegoat. On one hand, developers can feel secure knowing they won't be blamed when bad actors misuse their product. Meanwhile, businesses that want to stay in the public's good graces and out of trouble with the law will manage their use of AI to ensure accurate information and compliance with other laws already on the books. This promotes risk reduction without discouraging the use of AI and without adding burdensome compliance costs. By keeping those costs low, younger startups can stand on more equal ground against larger incumbents. The dual benefits of better competition and business accountability set the stage for better quality products and a wider variety of options offered to consumers.
Montana has an even simpler approach. Its proposed law recognizes that access to and use of technology is necessary for full participation in society, so it seeks to guarantee the 'Right to Compute' for all Montana citizens. As for risk, where other states would mandate burdensome reports at every level of deployment — Colorado, for example, requires developers and businesses report to the attorney general and consumers — Montana requires deployers to perform annual tests only where AI controls critical infrastructure.
This pragmatic approach to risk mitigation allows for less paperwork, freeing up time and resources to spend elsewhere. Montana's proposed legislation puts the technology and decision-making responsibilities firmly in the hands of the people and gives consumers the freedom to enjoy AI sooner. Policies in other states bury the benefits of AI under mounds of requirements and reports, taking up resources and slowing down AI deployment. Such an approach focuses on blocking all the myriad risks while Montana only worries about real harm.
Together, passed and proposed legislation in Utah and Montana should serve as a model for the federal government to emulate when drafting their preemptive framework.
The consumer-first approach offers greater freedoms and benefits to consumers than other states' risk-focused policies. The Mountain West approach guarantees every consumer the ability to use emergent tech however they like, and sets up incentives in a way that businesses will guard against risk without the need for burdensome compliance costs that would crush young startups. That means more competition and more consumer choice.
Together, these laws stand out from their peers. They evoke confidence in Americans to innovate responsibly while maximizing consumer choice and discretion. They do not stifle innovation by preemptively blocking risks. Should the federal government proceed in drafting a preemptive framework, it should incorporate the fundamentally American ideas Utah and Montana are pioneering.