US Senator Ted Cruz introduces AI 'Sandbox' bill for regulatory exemptions

Republican U.S. Senator Ted Cruz introduced a bill on September 10 that would allow artificial intelligence companies to apply for temporary exemptions from federal regulations to facilitate innovation, according to a Reuters report.

Cruz, who chairs the Senate Commerce Committee, emphasized during a hearing that the proposed regulatory sandbox is “not a free pass.” He noted that AI developers and users must still comply with existing laws.

If enacted, the bill would permit federal regulatory agencies to grant exemptions for up to two years at a time. Companies applying for these waivers would be required to disclose potential safety and financial risks, along with plans to mitigate them.

Federal regulators currently oversee rules related to health data privacy, transportation safety, financial market stability, and more.

Consumer advocacy group Public Citizen criticized the proposal, warning it could treat Americans as "test subjects." The group also expressed concern over a provision that would allow the White House Office of Science and Technology Policy (OSTP) to override agency denials of waiver requests.

Notably, Cruz’s bill does not block state-level regulation—something the tech industry had pushed for. The White House has previously stated that maintaining some regulatory flexibility is necessary to foster innovation.

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