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According to Palo Alto councilmember Greg Tanaka, SB-1047, ostensibly designed to regulate artificial intelligence (AI) and prevent potential harm—if signed into law—will hamstring technological progress, stifle small businesses, and harm California’s competitive edge in the global AI race. His Opp Now exclusive comments below.

California stands at a critical juncture. SB-1047 sits on Governor Newsom’s desk, awaiting his signature. The bill has the potential to impact our state’s role as the innovation capital of the world.

Let me be clear: regulating AI isn’t inherently bad. Thoughtful legislation can safeguard against unintended consequences. But SB-1047 is anything but thoughtful. It’s a rushed, overreaching attempt to control a technology that’s still in its infancy, with wide-ranging consequences that could damage California’s economy, creativity, and leadership in tech.

Innovation Suffocates Under Overregulation

Artificial intelligence represents the cutting edge of technological progress, with applications spanning from healthcare to finance, climate science to education. Silicon Valley, the global hub for innovation, is leading the charge in developing AI systems that will not only create jobs but also address some of society’s biggest challenges.

SB-1047 aims to regulate these systems by imposing strict compliance requirements that many companies—particularly startups and small businesses—simply cannot meet. The bill’s provisions, which include extensive reporting and auditing measures, create significant financial and bureaucratic burdens that will drive these businesses out of the state or into failure. Innovators will hesitate to start companies in California, and those already here may relocate to more business-friendly states or countries. When innovation leaves California, jobs follow.

Second, by holding developers liable for how their AI models are used, SB-1047 delivers a devastating blow to the open-source community. This thriving ecosystem, where collaboration fuels rapid innovation, will be stifled as developers are forced to think twice before sharing their work freely. Open-source AI has driven some of the most groundbreaking advancements. Yet, under this bill, the fear of legal consequences could paralyze that creativity. It’s no wonder that leading venture capital firms like Andreessen Horowitz and Y Combinator, along with countless startups, have spoken out against SB-1047. These are the very people driving the next wave of technological progress—and they know firsthand how this bill threatens to derail it.

Small Businesses Suffer, Big Tech Benefits

Ironically, the very companies SB-1047 seeks to target—large tech giants like Google, Meta, and Microsoft—are best equipped to handle the bill’s regulatory framework. These corporations have the resources to comply with rigorous regulations and may even gain competitive advantages by absorbing the costs and regulatory barriers that smaller players can’t afford. In this way, SB-1047 doesn’t level the playing field—it tilts it further toward Big Tech, consolidating power in the hands of a few monopolistic giants.

Meanwhile, the AI startups driving the most exciting innovations, from new diagnostic tools in medicine to personalized learning software for schools, will be suffocated by the very legislation meant to regulate them. The future of AI isn’t just about the big players; it’s about the entrepreneurs tinkering in garages and small labs, who are the lifeblood of California’s tech ecosystem.

A Global Race We Can’t Afford to Lose

While California contemplates slowing down AI innovation, other countries—China, Germany, and South Korea—are rapidly expanding their AI capabilities. AI is a crucial battleground in the 21st-century economy, and whoever leads in this technology will shape the future of global power. By pushing through restrictive laws like SB-1047, we risk ceding leadership in AI to foreign competitors who won’t be hampered by the same regulations.

What does this mean for the average Californian? Less investment in emerging technologies, fewer jobs in tech, and a slower pace of innovation across the board. AI could bring transformative benefits to sectors like education, transportation, and clean energy; but that won’t happen if we become a state known for stifling progress.

A Solution in Search of a Problem

Proponents of SB-1047 argue that regulation is necessary to protect against the dangers of unchecked AI, from biased algorithms to data misuse. While these are legitimate concerns, the bill fails to meaningfully address them. SB-1047 offers a vague and overbroad regulatory framework that provides more confusion than clarity. Rather than establishing a constructive path forward, the bill seeks to control AI through onerous oversight without understanding the nuances of the technology or engaging with the communities that create it.

In reality, many AI companies are already working diligently to ensure their systems are safe, equitable, and transparent. Self-regulation within the industry is growing, with numerous voluntary initiatives aimed at ensuring AI development adheres to ethical standards. More collaboration between policymakers and tech experts would lead to better, more targeted regulations that address real problems without stifling innovation.

Governor Newsom has always championed California’s role as a leader in technological innovation, but SB-1047 is a direct threat to that legacy. He has the opportunity to veto this misguided bill and call for a more measured, collaborative approach to AI regulation. By doing so, he will protect the future of small businesses, prevent job loss, and ensure that California continues to lead the way in AI development.

California has always been at the forefront of innovation, driving technological revolutions that change the world. We can’t afford to let poorly crafted legislation jeopardize our position at the top.

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