Texas’ AI Strategy Succeeds Where Biden and California Democrats Fall Short

The California Legislature is right in that the civilizational implications posed by AI technology necessitate a public policy response. But the response has been a cacophony of onerous regulations, wokeism, and a fundamental misunderstanding of emerging technologies.

Take California’s Senate Bill 1047, which recently passed out of the Senate. It is rife with the kind of suffocating regulations you would expect out of California. For example, the bill requires developers of AI models to demonstrate that there is no possibility that their covered model has a “hazardous capability” before they can initiate training. This is an impossibly high standard for major incumbents and a death knell for smaller competitors.

What’s more, the bill codifies the state’s vision of a cloud platform owned and hosted by the state, CalCompute, which would aid in “fostering equitable innovation” and assist in operationalizing the state’s $67 billion effort to embed “DEIA [diversity, equity, inclusion, and accessibility] in state operations.” This effectively enshrines the Google Gemini approach of only producing AI-generated images of black and Native American Founding Fathers.

That California is spending billions on a woke operating system might be comical if the race for AI legislation in the U.S. weren’t being driven by the states.

Considering the most recent substantial national tech policy laws are from the 1990s (e.g., the Communications Decency Act of 1996 and the Children’s Online Privacy Protection Act of 1998), it is no exaggeration to say the battle for tech policy is coming down to the states. While President Biden signed a largely ceremonial executive order on AI late in 2023, it is devoid of any meaningful substance and riddled with jarringly inappropriate initiatives such as partnering with the CCP on responsible AI development and further liberalizing immigration policy under the guise of increasing the pool of tech talent.

And if there is one thing the Biden administration has taught us about its approach to border security, the higher the stakes, the more it whiffs. We can’t make this same mistake with AI regulation, and we can’t make an already tenuous situation worse by letting California lead the way.

Through spectacular failure on the part of California and the Biden administration, coupled with the ingredients Texas has at its disposal, the Lone Star State is stepping into the breach to lead the nation with a responsible, pro-innovation legislative framework for AI.

Those ingredients include the infrastructure, talent, business environment, size, and, importantly, the public policy landscape conducive to responsible growth. Take, for example, that the tech sector’s economic effect in Texas in 2022 was approximately $470 billion, representing 20 percent of the state’s GDP, compared to California’s 10 percent.

Then there are AI’s astounding energy needs — and Texas generates more than double the electricity of the state of California. When it comes to tech talent, in addition to Texas being home to top-tier software engineering programs, Texas has dominated the country in job gains from business relocations, bringing with it some of the top tech talent in the nation.

As for public policy, unlike their counterparts in California, Texas lawmakers (specifically, Republican lawmakers) are taking a thoughtful and collaborative approach. In 2023, Texas state Rep. Giovanni Capriglione and state Sen. Tan Parker passed House Bill 2060, establishing an artificial intelligence advisory council. Here they are evaluating state agency use of AI in a series of intensive hearings and, subsequently, lawmakers will determine legislative recommendations in 2025 to ensure automated decision-making technology is employed by state agencies with Texans’ civil liberties in mind.

Rather than the California approach of digital equity and wokeism, Texas will create a national model for the public use of AI that emphasizes saving taxpayers money and time, while advancing transparency, privacy, and human dignity.

Further, Texas House Speaker Dade Phelan established a select committee on AI and Emerging Technology, creating an avenue for lawmakers to hold interim hearings on the private sector’s use of AI, where they will continue to hear from an array of experts to balance innovation with consumer protection. Given the stunning array of policy issues state lawmakers cover during a legislative session, this affords lawmakers a chance to hear from true experts on the harms, benefits, and legislative models for AI, rather than industry advocates who spew hollow platitudes in support of their employer’s pecuniary interests.

Finally, the chair of the Texas Innovation and Technology Caucus, Rep. Capriglione (who is no stranger to fraught technology issues, having championed the nation’s strongest consumer data privacy law), assembled an impressive stakeholder group to constructively hash out what will be a gold-standard omnibus bill on responsible AI use in Texas. Importantly, Texas lawmakers like Rep. Capriglione and Sen. Parker have been working on AI legislation since 2022 (first introducing HB 2060 in February 2023), patiently studying the issue to do things right rather than first.

Unlike the move-fast-and-break-things legislative approach of states like California, the nature of Texas’ biennial legislature affords state lawmakers the time and fora to learn about the technology, the trade-offs to different legislative frameworks, and how to avoid the mistakes of hasty legislative pushes in other states.

Texas is the only state of its size and influence that has a successful track record of balancing constitutional and civil liberty protections with innovation and indefatigable economic growth. These are just some of the key ingredients responsible for the Texas miracle. And based on the stunning legislative failures across the nation thus far, coupled with the disregard for humanity many large tech companies are taking in their approach to AI development, it’s going to take another Texas miracle to produce gold-standard legislation for AI oversight.

But as we say in Texas, what starts here changes the world.