California Privacy Agency Weakens AI Regulations Amid Business Pressure

California’s Privacy Protection Agency (CPPA) has significantly weakened its proposed regulations on artificial intelligence and automated decision-making technology after pressure from business groups, lawmakers, and Governor Gavin Newsom, reducing estimated compliance costs from $834 million to $143 million and exempting 90% of initially covered businesses. The revised rules no longer regulate behavioral advertising or require risk assessments for such practices, raising concerns among consumer advocates about reduced protections against potential AI-related harms. This retreat follows leadership changes within the CPPA, including the departure of key pro-consumer figures. Meanwhile, in Washington, top technology and AI executives, including leaders from OpenAI, Microsoft, and AMD, testified before Congress advocating for lighter AI regulations to foster innovation and prevent business migration to China. Senate Commerce Committee Chair Ted Cruz plans to introduce legislation promoting a “light-touch” regulatory approach, emphasizing rapid AI adoption and criticizing government oversight efforts, while industry leaders stressed the importance of AI safety, open interoperability, supply chain strengthening, and export controls balancing national security with international access. These developments underscore the ongoing tension between regulatory oversight and industry-driven innovation in the rapidly evolving AI sector.