AI Legislation Targets Innovation Economy

A new legislative proposal aimed at fostering artificial intelligence innovation could position Connecticut as a leader in the rapidly evolving field while driving economic growth.

Introduced by the legislature’s General Law Committee on behalf of the Lamont administration, SB 1249 features several key initiatives designed to attract AI developers and companies.

The bill, which also includes safeguards to ensure the responsible development of machine learning technologies, creates a new venture fund at Connecticut Innovations dedicated to investment in AI-driven startups, as well those focused on quantum computing.

It expands the state’s Open Data Portal, providing companies with valuable AI-ready datasets to support innovation while maintaining strict data protection standards to attract tech companies and support business growth. 

SB 1249 also emphasizes that the use of AI is not a defense or omission to a claim of discrimination.

Key Provisions

As AI continues to transform the economy on a global scale, legislation that positions Connecticut at the forefront of innovation while creating new opportunities for business growth and job creation is crucial.

SB 1249 is designed to enhance Connecticut’s business competitiveness in the AI sector through the following provisions:  

1. Make high-value state data available to AI developers while maintaining privacy protections. This access to quality data helps attract innovators and businesses that look to develop and test AI systems.
2. Establishes an Artificial Intelligence Regulatory Sandbox Program, allowing companies to test innovative AI technologies under a more flexible regulatory framework. Department of Economic and Community Development Commissioner Dan O’Keefe told the committee that ”Connecticut has a rich history of innovation and establishing a straightforward and developer-friendly AI sandbox would send a clear signal to the marketplace that Connecticut is open for business and focused on ensuring that our core industries build their future here—not in another state, or abroad.” 
3. Establishes an Artificial Intelligence and Quantum Technology Fund through Connecticut Innovations, the state’s venture capital arm, providing critical early-state financing for companies developing or deploying AI systems. 

CBIA’s Chris Davis told committee members that, “In today’s rapidly changing technological landscape, Connecticut employers must embrace innovation and adopt new tools in a timely manner in order to compete regionally, nationally, and globally.”

He added that SB 1249 “provides an important step towards continuing Connecticut’s storied history of innovation through the development of an actionable plan for a regulatory sandbox and strategic investments in early-stage companies and start-up ideas being spun out of Connecticut’s outstanding educational institutions and employers.”

The legislation maintains Connecticut’s strong consumer protection and anti-discrimination laws while creating new opportunities for AI development, utilizing new technology for economic growth in the state. 

Regulating AI

In addition to SB 1249, state lawmakers are reviewing proposals that regulate the use of AI. 

SB 2 is the omnibus bill that regulates the business use of AI and CBIA is monitoring its potential impact on small businesses.

It is similar to a bill that died in the House last session, based in part on concerns that its requirements were too broad and potentially burdensome to businesses. 

HB 6846 prohibits the distribution of AI-generated deceptive content before elections while making hosting platforms, rather than content creators, liable for such content—a provision that has raised concerns from businesses.

CBIA’s Paul Amarone told the Government Administration and Elections Committee “there needs to be clarifying language that ensures the liability for dissemination of AI-generated media is limited to the person who creates and disseminates it, and not on intermediaries such as cable or internet providers or other platforms hosting the content.” 

The Labor and Public Employees Committee has raised a proposal that will outline protections for employees.

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For more information, contact CBIA’s Chris Davis (860.244.1931) or Paul Amarone (860.244.1978).