Major tech companies have spent more than $30 billion acquiring artificial intelligence startups as they face mounting antitrust concerns as states rush to fill the federal regulatory gap with nearly 700 AI-related bills introduced in 2024 – an increase of almost 400% compared to 2023.
The flurry of activity includes workplace-focused federal legislation targeting algorithmic bias and worker surveillance, with Colorado becoming the first state to adopt comprehensive AI regulations.
Expert: AI shopping at tech giants raises alarm signals
Major tech companies have spent more than $30 billion acquiring AI startups, raising concerns about anti-competitive practices in the growing AI sector, according to Notre Dame law professor Roger Alford. To enrol Bloomberg LawThe former Justice Department antitrust official warned that tech giants may be evading regulatory scrutiny by classifying acquisitions as “partnerships” or “acqui-hires.”
Amazon, Apple, Googling, Meta And Microsoft have collectively absorbed at least 30 AI startups, using their “existing monopolies” in search, social media and voice support to integrate AI systems while potentially foreclosing competition, Alford wrote. This consolidation threatens both market innovation and national security.
This practice creates barriers for independent startups, which struggle to access essential development resources and distribution channels. As China actively pursues advanced AI capabilities for military applications, Alford called for stronger antitrust enforcement to promote domestic competition while preventing the transfer of technology to hostile countries.
“But like Pope Francis recently saidFor AI to fulfill its proper role, we need “a regulatory, economic and financial environment capable of limiting the monopolizing power of a few and ensuring that innovation benefits all humanity,” Alford wrote.
AI bills rise nearly 400% as states rush to regulate
State lawmakers saw an unprecedented wave of AI legislation in 2024, with lawmakers introducing nearly 700 AI-related bills, up from 191 in 2023, according to an Oct. 22 report report by BSA | The Software Alliance. The increase reflects increasing action at the state level amid federal inaction on AI regulation.
Colorado led the charge, becoming the first state to pass comprehensive legislation targeting high-risk AI uses. Meanwhile, California and Tennessee have implemented targeted reforms problems like data transparency and digital replicas. A total of 113 bills were passed throughout the countryof which 71 are specifically aimed at deepfake technology.
“Despite a dramatic increase in legislative activity around AI… policymakers are not yet united around one specific issue model of regulation,” the report said.
Governors also shaped policy through executive orders, with California’s governor leading the charge. Gavin Newsom vetoing legislation that would have regulated large-scale AI models.
With four additional lawmakers set to convene in 2025, the wave of regulations shows no signs of slowing. BSA urged lawmakers to pursue consistent approaches rather than conflicting models.
AI Bill package focuses on workplace automation
Three bills before Congress seek to create guardrails around AI in the workplace, as lawmakers grapple with concerns about automated employment decisions and employee privacy. The proposed legislation is aimed at this problems like algorithmic bias, employee surveillance, and accountability for AI.
The “No law on robot bosses”, introduced by Senator Bob Casey of Pennsylvania, would prohibit employers from making employment decisions based solely on AI systems, without human oversight. An accompanying bill, the “Stop spying on bosses,” addresses workplace surveillance by requiring transparency around employee monitoring practices.
The “Algorithmic Accountability Act‘ by Senator Ron Wyden of Oregon would require companies to assess AI systems for potential discrimination and bias before using them for critical employment decisions.
While the bills present an uncertain outlook during the current legislative session, they reflect the growing momentum for AI regulation at both the federal and state levels. In addition to Colorado being the first state to pass comprehensive AI legislation, Illinois now also requires employers to notify employees when AI is being used employment decisions.
For all PYMNTS AI coverage, subscribe to the Daily AI newsletter.
