California to Undermine Artificial Intelligence [AI] Innovation with New Legislation (SB 1047)

This past week, the California state legislature approved an Artificial Intelligence (AI) bill, SB 1047 that is being described as undermining innovation and hampering the development of the new technology.

Joe Lonsdale, founder of Palantir (NYSE:PLTR) – a firm engaged in AI development, slammed the legislation on X, casting shade on the new rules, stating he would no longer need to fly to California from Texas to work on AI.



The legislation is said to “create a labyrinth of red tape for startups, hindering their growth.”

The UAE quickly jumped into the fray, touting the Dubai AI Strategy 2031, which seeks to prioritize innovation with a flexible regulatory framework, including advanced data centers and high-speed connectivity, empowering AI development and deployment at scale.

Arto Bendiken, CTO and co-founder at Haltia.AI, stated:

“California’s SB 1047 is a prime example of how well-intentioned regulations can morph into a bureaucratic nightmare. These excessive requirements are practically impossible for startups to meet, and risk stifling innovation in its infancy. The financial penalties for non-compliance only exacerbate the issue, potentially deterring groundbreaking ideas before they even take flight.”

California's SB 1047 is a prime example of how well-intentioned regulations can morph into a bureaucratic nightmare Click to Tweet

Talal Thabet, CEO and co-founder of Haltia.AI, predicted that SB 1047 would strangle innovation in its crib.

“The UAE, on the other hand, is a breath of fresh air. Here, startups can focus on what truly matters: pushing the boundaries of AI and developing solutions that will shape the future.”

Haltia.AI is headquartered in Delaware but has an operating subsidiary in the UAE.

In recent years, California has excelled at chasing away both early-stage and later-stage firms. The byzantine approach to regulation, along with high taxes and growing crime, have compelled many businesses to leave and relocate to more business-friendly locations. One commenter on X predicted more companies will now exit California, stating;

“Cue the mass exodus of AI and tech companies from California. You just wrote the obituary for the prosperity of the California tech industry. Goodbye… we’re already planning on where to move next.”


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