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Editor’s Note: Utah has recently taken a bold step in setting new benchmarks for AI regulation through the enactment of the Artificial Intelligence Policy Act (Senate Bill 149). This groundbreaking legislation introduces stringent disclosure requirements and a regulatory framework that balances innovation with consumer protection. As AI technologies continue to permeate every facet of our lives—from healthcare to legal services—the implications of this Act are particularly significant for professionals in cybersecurity, information governance, and eDiscovery. This article explores the components of the Act, its potential impact on businesses, and the overarching benefits for the state’s technological landscape.

Industry News – Artificial Intelligence Beat

Utah Sets a New Standard in AI Regulation with the Enactment of the AI Policy Act

ComplexDiscovery Staff

In a notable move towards regulating the emerging field of artificial intelligence (AI), Utah has enacted the Artificial Intelligence Policy Act (Senate Bill 149), positioning itself as a trailblazer among U.S. states in the oversight of AI technologies. The legislation, which was signed into law on March 13, 2024, and takes effect on May 1, 2024, introduces comprehensive disclosure requirements and establishes a regulatory framework aimed at fostering both innovation and consumer protection.

The Utah AI Act mandates specific disclosure guidelines for entities deploying generative AI technologies in interactions with consumers, particularly in regulated professions such as healthcare and legal services. According to the new law, these entities must provide up-front disclosures when AI is used in communications with individuals, ensuring transparency in AI-enabled interactions. This approach aims to prevent any misleading representations and to maintain trust in digital communications.

A critical component of the Act is the establishment of an Office of Artificial Intelligence Policy within the state’s Department of Commerce. This office is tasked with consulting stakeholders on AI regulatory issues, facilitating the AI Learning Laboratory Program, and potentially providing regulatory relief through ‘Regulatory Mitigation Agreements’ for businesses pioneering new uses of AI technologies.

Nick Hafen, Head of Legal Technology Education at BYU Law, commented on the proactive nature of the legislation. “Utah is setting a precedent with its forward-thinking policies on AI regulation,” said Hafen. “This Act not only promotes responsible innovation but also positions Utah as a competitive hub for AI development, distinct from other states that might impose more burdensome regulations.”

Businesses within Utah are advised to adjust their practices according to the new regulations before they come into force. The law imposes penalties for non-compliance, which could include fines and other legal actions, underscoring the importance of adherence to the established rules.

The AI Learning Laboratory, a key initiative under the newly formed AI Office, will work on evaluating AI technologies’ risks and benefits, providing an experimental ground for companies to test AI solutions under regulatory oversight. This setup could potentially shield companies from some regulatory burdens while encouraging Innovation.

“The regulatory framework provided by the AI Act, combined with the operational support from the AI Learning Laboratory, offers a unique advantage to Utah businesses,” explained Hafen. “It prepares them to navigate the complex landscape of AI utilization while ensuring consumer protection and encouraging technological advancement.”

For institutions like BYU Law, the broader impact of this regulation extends beyond immediate legal frameworks to educational realms, preparing future legal professionals to adeptly handle AI-related challenges.

As AI technologies continue to evolve and permeate various sectors, the enactment of the Utah AI Policy Act marks a significant step towards striking a balance between innovation and responsible deployment. Utah has positioned itself as a leader in the AI regulatory landscape by setting clear disclosure requirements, establishing a dedicated regulatory body, and providing a controlled environment for AI experimentation. As other states and nations grapple with the complexities of AI governance, Utah’s approach may serve as a model for fostering a thriving AI ecosystem while prioritizing consumer protection and ethical considerations. The impact of this legislation is likely to extend far beyond the state’s borders, influencing the trajectory of AI development and regulation on a national and potentially global scale.

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Alan N. Sutin

Alan N. Sutin is Chair of the firm’s Technology, Media & Telecommunications Practice and Senior Chair of the Global Intellectual Property & Technology Practice. An experienced business lawyer with a principal focus on commercial transactions with intellectual property and technology issues and privacy

Alan N. Sutin is Chair of the firm’s Technology, Media & Telecommunications Practice and Senior Chair of the Global Intellectual Property & Technology Practice. An experienced business lawyer with a principal focus on commercial transactions with intellectual property and technology issues and privacy and cybersecurity matters, he advises clients in connection with transactions involving the development, acquisition, disposition and commercial exploitation of intellectual property with an emphasis on technology-related products and services, and counsels companies on a wide range of issues relating to privacy and cybersecurity. Alan holds the CIPP/US certification from the International Association of Privacy Professionals.

Alan also represents a wide variety of companies in connection with IT and business process outsourcing arrangements, strategic alliance agreements, commercial joint ventures and licensing matters. He has particular experience in Internet and electronic commerce issues and has been involved in many of the major policy issues surrounding the commercial development of the Internet. Alan has advised foreign governments and multinational corporations in connection with these issues and is a frequent speaker at major industry conferences and events around the world.