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Sixty-four groups representing causes related to civil rights, consumer advocacy and tech accountability are banding together to fight deregulation of the artificial intelligence industry. The California AI Working Group has signed a letter to members of Congress, opposing a bill that would allow financial firms to deploy artificial intelligence without regulatory oversight or enforcement by requesting a "waiver in the interest of innovation."

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Tina Rosales-Torres, policy advocate and attorney with the Western Center on Law and Poverty, said Senator Ted Cruz, R-Texas, is pushing a similar measure, called the Sandbox Act, that would apply to all sectors, not just finance.

"If the federal government gets their way with these preemption laws, then the State of California cannot stop AI companies from using individual data however they want, or even stop AI companies from raising the cost of living from bread to housing," he contended.

President Donald Trump recently issued an executive order declaring that federal AI policy would preempt state laws. Opponents say AI must be regulated to protect people’s privacy and make sure AI powered systems don’t contribute to racial inequities like access to housing or credit. Rosales-Torres said there are many examples of companies using A-I to manipulate prices.

"There were cases of Uber charging different prices for different people based on where they were, the time of day, whether their phone battery was full or lower," he continued. "So we're trying to stop that, but with the federal laws, we wouldn't be able to."

In 2022, the Department of Justice sued Facebook, alleging the company was targeting ads for housing based on what online history revealed about a user's race or current neighborhood. This week, Instacart said it would stop using an AI powered tool that allowed the grocery app to charge different prices for the same item, following an investigation by Consumer Reports.