On Wednesday, Senator Ted Cruz introduced the SANDBOX Act, proposed legislation aimed at establishing a regulatory “sandbox” for artificial intelligence (AI) companies. This framework would allow these companies to experiment with their products or services under reduced federal oversight.
If enacted, the SANDBOX Act would enable companies to apply for waivers or modifications to existing regulations that might hinder the testing and deployment of AI technologies. Companies utilizing AI in their offerings could seek these modifications for periods lasting two years, with the possibility of extending them up to ten years. In exchange, those companies would need to disclose strategies to mitigate risks associated with consumer safety and financial concerns.
The authority to grant these waivers would fall to the federal agency responsible for the regulations in question, such as the Federal Trade Commission (FTC), which manages online privacy protections. Should an agency fail to respond within 90 days, the waiver would automatically be granted; if rejected, companies could appeal to the White House Office of Science and Technology Policy (OSTP), which would oversee this sandbox program and have the power to overturn denials. Congress would receive annual reports detailing how frequently regulations were modified or waived.
Concerns have been raised by groups such as the Tech Oversight Project and Public Citizen about the implications of the bill. Critics suggest it could disproportionately favor larger tech companies, particularly those with political ties, over smaller startups. Additionally, there are apprehensions regarding the OSTP’s authority to override decisions made by federal agencies.
This proposal aligns with President Trump’s AI Action Plan, which advocates for regulatory sandboxes for AI and includes provisions affecting state-level AI regulations. Notably, Texas, Senator Cruz’s home state, has already passed a similar law that limits its own regulation sandbox to 36 months.
Source: https://www.theverge.com/ai-artificial-intelligence/776130/senator-ted-cruz-ai-sandbox-bill