AI at a Crossroads: A Nationwide Strategy or Californication?
2025-09-18
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Source: Congress.gov
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The committee will come to order. The subcommittee will come to order. Without objection, the chair is recognized to declare recess at any time. We welcome everyone here today for a hearing on the future of AI policy. I will note that this will be perhaps the last in a long series of AI hearings before several pieces of legislation will be marked up. So I encourage members on both sides of the aisle to make sure that this panel of witnesses are asked questions that may be germane to propose legislation or legislation already offered. I now recognize myself for an opening statement. Literally a generation ago or in technology, 10 generations ago, a sharp young man graduated from Cal State San Marcos in my congressional district. He joined a company that I then was CEO of, Directed Electronics, which had an inherent inventory problem. The inventory problem was that we had a few SKUs that sold well and we managed, and hundreds of SKUs that were constantly either out of or oversupply of. It wasn't anyone's fault. We had simply grown quickly, and there was a certain amount of inconsistency in what was being sold in a given month. So that bright young man took all of that inventory and the records and put it into SuperCalc, a precursor to Microsoft Excel. Within weeks, We had reduced our out-of-stock, increased our same-day delivery, trimmed inventory to a level that actually saved us over a million dollars a year in inventory maintenance cost.
That bright young man continued to work at the company for many years. He did not continue to use SuperCalc for long because technology quickly gave better and better tools. The man The program, the machine, both are necessary to implement and make AI a reality. But it was the man who made the machine that made the man a success. Over the last century, the US has led the way in virtually every area of technology because of our pro-innovation bias. We are the innovators. Well, China are the duplicators and Europe, yes, are the regulators. As we speak, though, my home state of California, with an economy larger than that of Italy, is rivaling the European Union when it comes to trying to lead on regulation. This wouldn't be such an ironic occurrence, except we are the home of innovation, and yes, the new bastion of regulation. But just as in the 1990s, when America led the internet revolution, a light touch such as that offered by the president in his initiative, in fact, must be the direction we go. Anything else will give us a problem that I will describe. If we, in fact, are not innovating 10 times faster than we're regulating, if the speed of innovation in the US is not at least months, or if possible, years ahead of China, their speed of duplication, some of it actually using AI to duplicate what we're doing, will in fact cause us to lose our edge.
My home state is part of the problem. The European Union is part of the problem. But as you'll see from our witnesses today, all 50 states have implemented some form of AI regulation. And in fact, they're in the neighborhood of 1,000 pieces of legislation spread over 50 states that will create, if allowed to continue, a patchwork of indecision by the AI industry. Given conflicting regulations, given the inability to roll out with certainty technology, that technology simply will not be a priority. Let there be no doubt though, either we win in innovation and we win in AI, or we lose our edge on the international stage. Vice President Vance said it best, America's AI technology must remain the gold standard worldwide. We must continue to produce the next generation AI, and we cannot do it with a patchwork of conflicting state laws. As of now, we are ahead. Let there be no doubt. We are ahead in hardware. We are ahead in software development. We are also on the leading edge of having the solutions for the energy problems. That includes modular nuclear reactors. It includes a willingness to provide innovative solutions. During the last break, I went to one of Apple's facilities, almost 1,700 acres located near Sparks, Nevada. What I saw there were some of the most impressive simple buildings filled with endless rows of of various levels of chips for both ai and conventional data storage what i also saw was a system that used zero conventional air conditioning to maintain that cooling they had managed to beat one of the major causes of product of of unrelated
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