Artificial intelligence giant OpenAI has submitted a "freedom-focused" policy proposal to the White House's AI Action Plan, seeking exemption from state laws that could stifle AI development and hinder the company's ability to compete with China. Specifically, OpenAI is targeting California's SB 1047, a sweeping AI safety bill that was passed and then vetoed by Governor Gavin Newsom in 2024.

The proposal, which was submitted last Thursday, outlines OpenAI's industry wishlist, including the use of trade laws to export American AI dominance, loosening copyright restrictions for training data, and investing billions in AI infrastructure. However, the company's primary concern is the proliferation of state laws that could create a regulatory deluge, with hundreds of AI-related bills flooding state governments nationwide.

SB 1047, in particular, poses an existential threat to OpenAI, as it would place strict security restrictions and legal liability on frontier labs developing new AI models that conduct business in California. OpenAI publicly opposed the bill, arguing that it would hamper the industry's growth and global leadership. Dean Ball of the libertarian Mercatus Center expressed confusion over OpenAI's proposal, noting that it does not include a national framework to replace state laws.

The lack of federal action on AI regulation has led to a surge in state-level proposals, with 893 AI-related bills up for consideration in 48 states, according to government relations firm MultiState.ai. This explosion in AI-related legislation is unprecedented, with experts describing it as a "regulatory deluge" that could create chaos for citizens and AI companies alike.

OpenAI's argument against state regulation reflects a common perception that 50 states enforcing 50 versions of AI law would create chaos. However, with a lack of federal action and an explosion of AI impact on people's everyday lives, state-level proposals are skyrocketing. The bills address a broad range of concerns, from political deception and AI-generated nonconsensual intimate imagery to the use of AI tools in handling utilities during natural disasters.

Experts believe that OpenAI is relying on the threat of China to push its goals forward, inflecting its proposal with Trumpian nationalism. "The Trump Administration's new AI Action Plan can ensure that American-led AI built on democratic principles continues to prevail over CCP-built autocratic, authoritarian AI," OpenAI writes in its comments. This strategy is seen as a way to get people to pay attention, as the threat of China is often used to justify policy decisions.

The implications of OpenAI's proposal are far-reaching, with the potential to shape the future of AI development and regulation in the United States. As the tech industry continues to grapple with the challenges of AI governance, OpenAI's proposal serves as a stark reminder of the need for a comprehensive national framework to regulate AI development and ensure that the technology is developed in a responsible and ethical manner.