Back Up The AI Moving Trucks?: The Implications of SB 1047 for San Francisco
Until COVID-19 hit, San Francisco was at the epicenter of global technology innovation. Our City has a proud history, especially over the past two decades, of facilitating a technology ecosystem that gave birth to companies like Salesforce, Twitter, DropBox, Airbnb, Uber, Lyft, and OpenAI among so many others. These companies not only changed the world, but continue to provide jobs, tax revenue and other benefits for San Francisco.
San Francisco ranks dead last amongst United States cities in post-COVID economic recovery, and with our downtown being a shell of its former self with record high commercial vacancies, we need to both diversify our local economy, while doing everything possible to foster the next generation of technology companies in our own backyard.
Today, one of the major hopes to anchor our next generation of technology companies in San Francisco is in the realm of artificial intelligence (AI). AI is changing the world around us and is expected to help generate $15 trillion to the global economy by 2030. Not only is California leading this revolution with over 4,000 AI companies, but many of the leading companies, from OpenAI to Databricks, are founded and based in San Francisco. It has given our local economy a desperately needed boost and attracted talent from around the world. As a City, we have a golden opportunity to nurture this AI ecosystem to drive sustained economic growth for years to come.
Regulating the future of AI is a hot topic amongst politicians, and making sure there are well thought-through guardrails for the industry is something everyone agrees on. However, we are still in the proverbial first inning of AI’s evolution, and government has to be careful not to over-regulate an industry to death in its infancy: not only are government officials inherently less educated about AI, but we also run the risk of ceding AI leadership to other countries, which could have catastrophic effects from national security threats to limiting our competitiveness on the global stage.
AI should be regulated at the federal level — having states promulgate individual AI constructs literally makes zero sense. Furthermore, states that take an early stab at regulation will inherently get it wrong as AI continues to evolve literally on a daily basis, and perhaps most significantly, stymie AI innovation in their own jurisdictions.
That is specifically why everyone in San Francisco should be alarmed about SB 1047, which is currently circulating through the California legislature, and could have significant unintended consequences for our City’s economy. SB1047 has the potential to kill our nascent AI ecosystem in San Francisco and stop the one kernel of hope our fragile local technology economy has today.
I have no doubt SB 1047 is well-intentioned. It is authored by state senator Scott Wiener, a former colleague of mine on the San Francisco Board of Supervisors, who I have great personal and professional respect for. However, it is dangerous for San Francisco.
San Francisco’s reputation as a leader in technology and innovation is built on our City’s ability to embrace new ideas, partner with growth industries, and act as a sanctuary for research and development. SB 1047’s broad regulatory approach threatens to undermine this leadership, and there is a real threat AI companies will move out of San Francisco (and California). Perhaps more importantly, investors will no longer fund new AI companies in San Francisco, but instead look out of state for investments or mandate that any local AI companies move out of state before receiving new funding. I have already spoken with AI companies who have halted planned expansions into San Francisco, and investors who are actively planning to move their San Francisco-based AI companies either out of state or out of the country. San Francisco’s status as a global technology hub is predicated on our ethos of embracing innovation, and SB 1047’s constraints will place us at a competitive disadvantage, driving talent and investment to more permissive jurisdictions.
That is exactly the opposite of what we want to happen.
Opposing SB 1047 does not mean disregarding the importance of ethical AI development. Instead, it means advocating for a more collaborative approach at the federal level that will have broader positive impacts, and not turning a quickly emerging part of the technology industry away from California and San Francisco. Locally, we should support efforts to address ethical concerns in AI while ensuring that our federal regulatory framework fosters an environment where innovation can flourish.
SB 1047 represents a pivotal moment in California’s approach to technology innovation, and the implications of this bill are potentially profound for San Francisco. While the intent behind SB 1047 may be to address important ethical concerns, its provisions risk stifling the innovation that defines our City and undermining our economic stability. Let’s leave AI regulation to the federal government, and locally, instead focus on fostering technology innovation, including AI, rather than giving the industry a reason to leave us.
San Francisco’s economy, and our future as the global leader of technology innovation depends on it.
