‘We cannot afford to get AI wrong’: State lawmakers debate best path to regulate AI boom

As the artificial intelligence industry rapidly expands, state legislators appear poised to continue imposing regulations on the technology.

Committees in both chambers of the Illinois General Assembly have heard bills this session that would implement restrictions and make recommendations on the use of AI in state government and certain industries.

The Senate recently held two virtual hearings on nearly 50 bills related to AI and consumer protection, privacy, education and data centers.

Sen. Mary Edly-Allen pointed to social media as an example of what happens when government does not place guardrails on new technology.

“If we got social media wrong, and we did, we cannot afford to get AI wrong,” the Democrat from Libertyville said. “Will we act on the lessons we have already learned?”

Industry stakeholders have recommended that state lawmakers let the federal government take the lead on regulations. However, President Donald Trump declared via executive order in December that he is not in favor of broad AI regulations.

“Our core concern is creating a patchwork environment, making Illinois a compliance outlier,” said Jarrett Catlin, state AI policy advisor at TechNet, a national technology policy advocacy group. “We need to create clear incentives for responsible behavior without prescribing a one-size-fits-all compliance regime.”

The “patchwork” argument echoes the president’s executive order, which declares that companies must be “free to innovate without cumbersome regulation,” and that state regulation “thwarts this imperative.”

State senators emphasized that they do not want to hinder development and business in the state but are deeply concerned about the lack of oversight, particularly around chatbots and young people.

“This isn’t about stifling innovation … but you need to have guardrails to protect minors,” said Sen. Sue Rezin, a Republican from Morris.

As lawmakers consider regulations, industry donors spent millions supporting “pro-AI” candidates in the midterm primary elections, with mixed results in statewide and national races.

Current and proposed statutes

Illinois already has some laws targeting AI use in image manipulation and intellectual property, according to Andrew Cunningham, senior director of government relations for the Illinois Chamber of Commerce. And broader legislation can be applied to AI usage, as has been done to AI meeting tools under the Biometric Information Privacy Act.

“In many ways, our state laws are adaptive, and bad actors using AI, or any technology, irresponsibly are not operating without potential legal ramifications,” Cunningham said in a statement to Capitol News Illinois.

Ketan Ramakrishnan, a Yale University law professor, testified at the Senate hearings on the use of civil law to hold AI companies accountable.

“A lot of these early chatbot suits that you’re seeing are being brought through the common law in various states,” Ramakrishnan said. “These absolutely are not enough, as these systems become more powerful, but they provide an essential basis for other laws that might be passed.”

The state chamber of commerce is also working with the Illinois Department of Human Rights on implementation of a bill passed in 2024 that prohibits employers from using AI for recruitment, hiring and other employment-related decisions in ways that could result in discrimination of a protected class.

A growing number of businesses have begun implementing AI in daily tasks, from generative AI in marketing campaigns to AI programs that analyze large data sets.

Cunningham said that while AI is playing an “increasingly important” role for businesses, its adoption is still in the early stages, with many companies navigating how to apply it.

“There is certainly growth in the hard and soft tech innovation sector when it comes to AI, but today many small businesses are relying more and more on AI to compete in today’s economy and expand their presence with limited budgets,” Cunningham said. “AI is also helping mid-sized and larger businesses with product development, cybersecurity, and tough fixes in our supply chain.”