⚖️ AI Model Training Disclosure Law

Author

Liam Gill
November 16, 2024

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Overview of California’s AB-2013 Law

California's AB-2013, signed into law by Governor Gavin Newsom, requires companies developing generative AI systems to publish detailed summaries of the data used to train their models. These disclosures must include information on data ownership, how the data was sourced or licensed, and whether the datasets contain copyrighted or personal information. Although the law applies to AI systems released after January 2022, compliance isn’t required until January 2026, giving companies time to adjust their data practices. For tech startups, this law represents both an opportunity to build trust and a potential legal minefield.

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Legal and Business Implications for Startups

For startups, AB-2013 presents significant challenges, particularly around the use of web-scraped data for training AI models. Startups that rely on unlicensed or copyrighted data could face legal risks as the law forces them to disclose the nature of their training datasets. With lawsuits already mounting over AI training data—especially regarding copyright violations—startups must reassess their data collection strategies. Ensuring data compliance through proper licensing or legal vetting will be crucial to avoiding litigation and maintaining a competitive edge.

Potential Shifts in the Competitive Landscape

The competitive dynamics for AI startups could also change as AB-2013 requires companies to disclose proprietary training data details. These datasets are often considered trade secrets, and making them public could expose startups to competitive disadvantages. Some companies may even choose to withhold models from the California market to avoid these disclosures altogether. For startups developing AI models, this law underscores the importance of balancing legal obligations with competitive strategy, while continuing to innovate and bring compliant products to market.

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