Artificial intelligence is writing police reports, answering customer service calls, and summarizing your emails, and in many cases, without you realizing it. That’s changing as states across the country rush to pass laws requiring businesses and government agencies to let people know when AI is making the decisions or processing their interactions.
Two states, Utah and California, have taken the lead with sweeping new disclosure rules, but the push for transparency has also created a pitched debate over whether these regulations will protect consumers or threaten the future of American tech innovation.
Recently, Utah’s Department of Commerce put into place regulations that require the state’s regulated businesses to disclose their use of AI in customer communications and service delivery. The rule is straightforward: if you’re talking to an AI system, you have a right to know.
“They just want to be able to know,” Margaret Woolley Busse, the department’s executive director, told NPR. Under the new framework, customers can ask directly if they are talking to a human or a machine, and chatbots must truthfully respond.
New California Law Requires Police to Disclose AI Use in Incident Reports Amid Growing State-Federal Divide on AI Regulation
California, which pioneered the requirement for chatbot disclosure back in 2019, has now expanded those rules significantly. The updated law targets law enforcement agencies, requiring police departments to disclose when AI technologies draft or assist in writing incident reports.
The expansion reflects growing concern about automated decision-making in the public sector, particularly in areas touching on people’s rights and freedoms.
Matthew Guariglia, a senior policy analyst with the Electronic Frontier Foundation, said transparency is crucial to accountability. “AI in general and police AI in specific really thrives in the shadows, and is most successful when people don’t know that it’s being used,” he said.
His organization has thrown its support behind California’s disclosure requirements and points to San Francisco as a model, where city departments already must publicly report their use of AI.
But as states forge ahead with their own regulations, the federal government is pumping the brakes. The Trump administration has made clear it views the growing patchwork of state laws as a problem. David Sacks, the White House’s top technology adviser and “AI Czar,” recently criticized what he called a “state regulatory frenzy that is damaging the startup ecosystem.”
The Debate Over AI Regulation and Transparency
The administration’s concern is about the practical effects on technology companies that will now have to operate under different rules in different states. Overlapping and competing demands may stifle innovation, officials fret, and make life particularly difficult for upstart competitors.
That argument resonates with some industry observers. “You can think of an electrician that wants to use AI to help communicate with his or her customers,” said Daniel Castro, vice president of the Information Technology & Innovation Foundation.
Transparency comes with trade-offs, he said. If disclosure requirements make consumers uncomfortable with AI involvement, “maybe that turns off the customers and they don’t really want to use it anymore.”
For advocates of disclosure laws, though, that is not necessarily a bad outcome. Kara Quinn, a homeschool teacher in Bremerton, Wash., said she’s deeply uncomfortable with how quickly AI has permeated everyday life without meaningful consent.
“Part of the problem, I think, is not just the thing itself; it’s how fast our lives have changed,” Quinn said. She recently changed email providers after her service started using AI to auto-summarize messages. “Who decided that I don’t get to read what another human being wrote?” she asked. “I value my ability to think. I don’t want to outsource it.”
Who Gets to Decide How Quickly the World Changes?
Quinn’s concerns capture a tension at the heart of the disclosure debate. Technology companies often frame AI as a helpful tool that makes services faster and more efficient. But critics argue that people deserve the right to choose whether they want AI involved in their communications, decisions, and daily interactions, and they can’t make that choice if they don’t know AI is being used in the first place.
But as more states consider similar legislation, the question is no longer about transparency. It’s about who gets to decide how quickly artificial intelligence reshapes our world, and whether consumers get any say in the matter. And with the federal government pushing back while the states push forward, that battle is just beginning.
