Decades in Business, Technology and Digital Law

First State Law Takes Effective Regulating Generative AI

by | May 1, 2024 | Firm News

The Utah Artificial Intelligence Policy Act, which takes effect on May 1, 2024, marks a pioneering move in AI regulation within the United States, particularly focusing on consumer protection and transparency in the use of generative AI. Here’s a summary of the key aspects of the Act:

  1. Scope and Definitions: The law specifically targets generative AI, defined as systems that learn from data and generate human-like responses with minimal oversight. This includes chatbots and other AI that interacts through text, audio, or visuals.
  2. Disclosure Requirements: The Act mandates clear disclosures about the use of generative AI:
    • Regulated Occupations: Entities like healthcare providers must disclose the use of generative AI at the beginning of any interaction.
    • Non-regulated Businesses: Must provide clear disclosures when directly asked by consumers whether they are interacting with AI.
  3. Liability and Enforcement: Businesses cannot deflect responsibility onto the AI. The Utah Division of Consumer Protection can impose fines up to $2,500 per violation, and the Attorney General can impose penalties of $5,000 per violation for breaches of existing orders.
  4. Innovation and Compliance: The Act encourages innovation through the establishment of an Office of Artificial Intelligence Policy and an AI Learning Laboratory Program. Businesses are urged to adapt to these regulations by integrating explicit AI disclosures and training staff on AI interactions.
  5. Potential Model for Other States: Utah’s legislation could serve as a blueprint for other states considering similar regulations.

The Act represents a significant step towards greater accountability and transparency in the commercial use of AI technologies, likely influencing broader AI governance across the country​.

The bottom line is that companies subject to the Utah regulation will need to implement a compliant disclosure procedure. Additionally, as more states start regulating AI, companies should consider modifying procedures to comply as a best business practice even if they are not actually subject to the law.