Search online for “artificial intelligence.” Do it daily for a week. Thanks to how quickly this technology is advancing, you’ll get seven very different search results.

As quickly as AI is developing, state legislatures are moving just as quickly to try to control it — including here in Nebraska.

LB 642, which its sponsors call the Artificial Intelligence Consumer Protection Act, threatens AI development across the state. Not only would it add at least $10,000 in compliance costs for small businesses, but it would raise prices, reduce options, and strip access to life-changing AI tools from everyday Nebraskans, too.

Instead of advancing this problematic proposal, legislators should take steps to help consumers by driving more innovation in AI. 

Rely On Existing Law

That includes relying on existing legal frameworks to solve any problems that the technology might cause. As well as cutting both red tape and taxes to make it easier to innovate here—which will create more jobs, spur more investment, and unleash more opportunities for Nebraska families.

The primary focus of LB 642 is “algorithmic discrimination,” which might seem like a reasonable thing to stop. No decent person wants discrimination, right? 

But there are plenty of local, state, and federal laws on the books that already prohibit discrimination. And there are numerous agencies and enforcement offices with decades of expertise and experience in enforcing those laws when they’re broken.

That’s why, just last year, the Attorney General of Massachusetts clarified that existing consumer protection laws would apply to AI. There’s no reason Nebraska could not do the same.

This bill would not just add unnecessary complexity, though. It could cause damage.

Disclosure Could Cause Issues

LB 642 includes a long list of disclosure and reporting requirements for both AI developers and companies that use AI to follow if they want to do business here. But why? We don’t force farmers to get permission before they try new methods of seeding fields or harvesting crops. 

In the same way, demanding that businesses preemptively explain to the government why their AI development does not break the law effectively treats them as “guilty until proven innocent.”

That’s unfair. It’s also expensive, because these exhaustive reporting requirements would carry enormous compliance costs. After all, businesses wouldn’t just need to fill out a simple checklist once. They would need to update their disclosure information each time they made a substantive change to their program. 

New interpretations of the law by the courts or regulators could move the goalposts so that what was acceptable under the law one day becomes a violation the next. 

It’s obvious where that would lead: Only big businesses with a lot of money and lawyers could afford those compliance costs, while small businesses and startups could be forced to close down or leave town.

In fact, a think tank in Virginia found that a similar proposal would subject that state’s small businesses to anywhere from $10,000 to $500,000 in compliance costs each year—while larger corporations might spend $10 million or more to stay legal.

That kind of economic impact helps explain why even California did not pass a watered-down version of this policy last year.

Consumers Would Pay

Of course, the people who would pay the biggest price wouldn’t be business owners. It would be consumers.

It’s impossible to calculate the damage they would suffer because of overregulation of AI, from higher bills and worse service to fewer options for every imaginable service.

Who knows what life-changing opportunities Nebraskans would miss as AI revolutionizes everything around us — from farming and ranching to health care and entertainment?

If policymakers in Lincoln truly want to protect Nebraskans from harm, they should refuse to strangle the seed of innovation before it has the chance to grow.

Existing laws already prohibit discrimination. There’s no need to pile on redundant regulations.

Instead, lawmakers should take a pro-growth approach like those of states like Utah and Indiana, where industry leaders collaborate on identifying the barriers they face when deploying AI to lower prices, improve outcomes, and solve problems across industries.

We have an opportunity to make Nebraska a leader in AI development and to enjoy all the benefits that would bring. For the sake of our economy, our businesses, and our people, let’s make the most of it. 

That means encouraging innovation, not smothering it.

Andy Reuss is a former U.S. Senate technology policy advisor and White House speechwriter. He runs The Penn Ave Group, a communications consulting firm based in Elkhorn, with his wife. This story was published by Nebraska Examiner, an editorially independent newsroom providing a hard-hitting, daily flow of news. Read the original article: https://nebraskaexaminer.com/2025/02/21/nebraska-should-encourage-ai-inn...

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