What is the “Great American AI Act?” and How Will it Impact Companies?

Another piece of AI legislation was recently introduced in Congress. The “Great American Artificial Intelligence Act” (GAAIA) is the latest attempt to advance a national AI regulatory framework for frontier AI developers. A recent McGuire Woods memo dives into what the law is and how it may impact companies:

• “The bill is primarily aimed at the biggest AI developers with more than $500 million in revenue that are building cutting-edge AI models rather than most typical businesses developing in-house AI or deploying commercial AI models.
• The proposed preemption provision would leave many state-law obligations governing AI deployment intact, including employment, privacy, consumer protection, healthcare, financial services, and common-law claims.
• The draft would increase fraud-related penalties and reflects a broader enforcement trend toward applying existing fraud and misconduct frameworks to AI-enabled conduct.
• If this bill passes, many of the legal risks businesses face when using AI will remain unchanged.”

The memo notes that the bill is generating publicity and controversy. However, if passed, the law will not impact most companies directly. GAAIA’s compliance provisions would only apply to frontier AI developers. The draft also includes only limited preemption language. It would invalidate some state laws regulating AI development, but would not preempt AI-related product liability, contract, employment, privacy, consumer protection, or common law claims. Ultimately, the GAAIA may mark a major milestone for federal AI regulation. Though its direct impacts will be limited to the AI industry’s major players.