Elon Musk’s xAI sues Colorado over state’s new AI law
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The law imposes disclosure and risk-mitigation requirements on developers of so‑called "high‑risk" AI systems used in decisions involving employment, housing, education, health care and financial services. ...
Elon Musk's artificial intelligence firm said the law violates the First Amendment by restricting how developers design AI systems and compelling speech on contentious public issues.
The company says the law would force it to alter its flagship AI model, Grok, to reflect the state's views on diversity and discrimination rather than being objective. ...
While some tech companies and Republican lawmakers want states to leave AI regulation to Washington, California's attorney general has warned against relying solely on Congress, pointing to years of delays on data privacy and technology laws. ...
See the full story here: https://www.reuters.com/legal/government/elon-musks-xai-sues-colorado-over-states-new-ai-law-2026-04-09/
Major Federal AI Developments Signal a Rapidly Shifting Regulatory Landscape
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I. The Trump America AI Act – Sweeping Federal AI and Platform Reform Proposal
Blackburn has released a discussion draft of The Republic Unifying Meritocratic Performance Advancing Machine Intelligence by Eliminating Regulatory Interstate Chaos Across American Industry Act (the “Trump America AI Act”). The bill is expansive in scope, combining AI-specific requirements with broader reforms to Internet liability, platform governance and digital infrastructure.
Key Elements of the Bill
Repeal of Section 230
- The bill would repeal Section 230 of the Communications Act of 1934, (18 USC Sec. 230) after a two-year transition period, reversing the broad immunity that has been historically enjoyed by social media platforms and other communications entities over liability for content.
- This change would significantly expand potential liability for online platforms with potential downstream effects on moderation practices and platform design. Namely, companies may need to adjust moderation policies and methods or reduce reliance on engagement-driven ranking features.
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Although the TRUMP AMERICA AI Act has not been formally introduced and is unlikely to advance in its current form, it provides a useful roadmap of policy directions that may shape future federal proposals and state-level legislation. ...
See the full story here: https://www.manatt.com/insights/newsletters/manatt-digital-and-technology/major-federal-ai-developments-signal-a-rapidly-shifting-regulatory-landscape
When Flock Comes to Town: Why Cities Are Axing the Controversial Surveillance Technology
Early this year, my home city of Bend, Oregon, ended its contract with surveillance company Flock Safety, following months of public pressure and concerns around weak data privacy protections. Flock's controversial AI-powered license plate cameras were shut down, and its partnership with local law enforcement ended. ...
Though Flock doesn't have a direct partnership with federal agencies (a blurry line I'll discuss more), law enforcement agencies are free to share data with departments like ICE, and they frequently do. ...
Following Super Bowl ads about finding lost dogs, Flock was under scrutiny about its planned partnership with Ring, Amazon's security brand. The integration would have allowed police to request the use of Ring-brand home security cameras for investigations. Following intense public backlash, Ring cut ties with Flock just like my city did. ...
See the full story here: https://www.cnet.com/home/security/when-flock-comes-to-town-why-cities-are-axing-the-controversial-surveillance-technology/
Whose AI Is It Anyway? Key Developments in the Evolving Relationship Between AI and IP
- Divergence across major jurisdictions on key issues such as the protectability of AI tools and outputs, the use of copyrighted data for AI training, and the requirements for inventorship and authorship require companies to adopt different IP strategies in different countries.
- In the U.K. and EU, the scope for patent protection of AI tools has broadened, which may be prompting some companies to shift from relying on trade secret and copyright protections toward implementing formal patent strategies.
- The use of copyrighted works as AI training data is a major area of contention.
- The proliferation of AI-generated voices and images has intensified concerns over digital identity rights. Celebrities and notable figures are exploring a patchwork of different protections.
See the full story here: https://www.skadden.com/insights/publications/2026/04/insights-april-2026/whose-ai-is-it-anyway
Open AI Policy Doc
Key points of Open AI's policy blueprint outlining how governments should prepare for AI-driven economic disruption, including proposals for a public wealth fund, taxes on automated labor, and incentives for employers to pilot 32-hour workweeks with no loss in pay.
- The 13-page document argues that superintelligence (AI systems capable of outperforming the smartest humans) is on the horizon, and recommends a new social contract to manage the transition, comparing it to the Industrial Revolution.
- OpenAI proposes a public wealth fund that would invest in long-term assets tied to the AI economy, with returns distributed directly to citizens regardless of their current financial market holdings.
- The company also recommends shifting the tax base away from labor income and payroll taxes toward corporate profits and capital gains, including new taxes specifically tied to automated labor as AI reduces traditional employment.
See the full story here: https://www.businessinsider.com/openai-superintelligence-ai-upheaval-tax-shorter-workweek-public-wealth-fund-2026-4
OpenAI’s Altman releases blueprint for taxing, regulating artificial intelligence
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OpenAI and its CEO and co-founder Sam Altman compared society’s current circumstances to the transition to the Industrial Age and the Progressive Era and New Deal that followed.
“In normal times, the case for letting markets work on their own is strong. Historically, competition, entrepreneurship, and open economic participation have lifted living standards and expanded opportunity,” the document stated, adding, “But industrial policy can play an important role when market forces alone aren’t sufficient—when new technologies create opportunities and risks that existing institutions aren’t equipped to manage.” ...
The recommendations include the creation of a public wealth fund to give every citizen a “stake in AI-driven economy growth” regardless of their current investments in financial markets. The company also called for taxes “related to automated labor,” given AI could reduce the tax base funding programs like the Supplemental Nutrition Assistance Program, Social Security and Medicaid.
Altman also suggested new ways for public input to make sure the technology isn’t just developed with the perspectives of “engineers or executives behind closed doors.” ...
The company also suggested expanded job opportunities in human-centered job sectors like child care, health care and community services where AI may help these workers but not eliminate jobs. ...
See the full story here: https://thehill.com/policy/technology/5817906-openai-ai-policy-recommendations
China to regulate use of digital humans
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The draft requires that providers of services involving digital humans, which are human-like virtual beings capable of voice chat or other forms of interaction, must continuously display a prominent label reading "digital human" alongside such content.
According to the draft, the use of individuals' sensitive personal information for generating and modeling digital human images must be subject to their informed consent.
It stipulates that no organization or individual may use digital humans with identifiable traits of specific natural persons without their consent.
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See the full story here: https://english.news.cn/20260403/ae0d10c6c7d4408e8f7c407593bbb1b2/c.html
Penalties stack up as AI spreads through the legal system
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In the meantime, AI itself has strayed into the crosshairs of the legal profession. In March, OpenAI, the maker of ChatGPT, was sued by Nippon Life Insurance Company of America in federal court in Illinois. The insurance company says it was the target of frivolous legal actions by a woman who was getting bad legal advice from ChatGPT.
Among other things, the lawsuit accuses OpenAI of practicing law without a license. In a written statement to NPR, OpenAI responded, "This complaint lacks any merit whatsoever."
See the full story here: https://www.npr.org/2026/04/03/nx-s1-5761454/penalties-stack-up-ai-spreads-through-legal-system
Manatt Launches AI Consulting and Testing Service Offering
Manatt announced the launch of its new AI Consulting and Testing (AICT) service offering, a multidisciplinary initiative that enhances Manatt’s existing legal and consulting experience with new testing capabilities to help organizations safely and responsibly build, deploy and oversee AI systems.
This new service offering includes AI testing, regulatory‑aligned governance, model validation and outcome-based testing, including bias testing, procurement support and ongoing monitoring—giving clients a defensible, end‑to‑end approach to responsible AI. ...
AICT supports clients that are developing or deploying AI tools across highly regulated and fast‑moving sectors—including health care, financial services, consumer products, entertainment and employer AI use cases—offering services across four pillars of responsible AI: Strategy & Governance; Testing & Evaluation; Procurement & Vendor Oversight; and Ongoing Monitoring & Compliance. ...
see the full story here: https://www.manatt.com/insights/news/2026/manatt-launches-ai-consulting-and-testing-service-offering
AI benchmarks are broken. Here’s what we need instead.
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It soon became clear that the benchmark tests on which medical AI models are assessed do not capture how medical decisions are actually made. Hospitals rely on multidisciplinary teams—radiologists, oncologists, physicists, nurses—who jointly review patients. Treatment planning rarely hinges on a static decision; it evolves as new information emerges over days or weeks. Decisions often arise through constructive debate and trade-offs between professional standards, patient preferences, and the shared goal of long-term patient well-being. No wonder even highly scored AI models struggle to deliver the promised performance once they encounter the complex, collaborative processes of real clinical care. ...
When high benchmark scores fail to translate into real-world performance, even the most highly scored AI is soon abandoned to what I call the “AI graveyard.” ...
HAIC benchmarks reframe current benchmarking in four ways:
1. From individual and single-task performance to team and workflow performance (shifting the unit of analysis)
2. From one-off testing with right/wrong answers to long-term impacts (expanding the time horizon)
3. From correctness and speed to organizational outcomes, coordination quality, and error detectability (expanding outcome measures)
4. From isolated outputs to upstream and downstream consequences (system effects)
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See the full story here: https://www.technologyreview.com/2026/03/31/1134833/ai-benchmarks-are-broken-heres-what-we-need-instead/
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