New York City Council Subpoenas SpaceXAI as Major AI Companies Face First Safety Hearing

NYC Takes Unprecedented Action on AI Regulation

The New York City Council issued a subpoena to Elon Musk's SpaceXAI on September 28, compelling testimony at a rare Committee of the Whole hearing on October 5 focused on AI safety and regulation1

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. All 51 council members will participate in what marks the first time major AI companies testify publicly under oath before city lawmakers2

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. Council Speaker Julie Menin sent the subpoena after SpaceXAI became the only company among five contacted that failed to respond to voluntary testimony requests sent between September 15 and 175

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OpenAI, Google, Meta and Anthropic initially resisted appearing but agreed to testify only after the Council threatened legal action2

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. Meta was the sole company to accept the initial invitation voluntarily, while Anthropic, Google and OpenAI confirmed participation on Sunday, just before subpoenas would have been issued5

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. The Council has authority under the New York City Charter to compel testimony during investigations and may seek enforcement through the New York State Supreme Court if SpaceXAI refuses to comply2

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Sweeping Legislative Package Targets AI Oversight

On September 25, Menin unveiled a package of 10 bills designed to establish comprehensive AI oversight legislation in New York City3

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. The broadest proposal would prohibit businesses from selling or deploying AI systems in the city without third-party validation of AI systems checking for data quality, bias, privacy and cybersecurity vulnerabilities3

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. Companies would need outside experts to verify their internal safety claims before launching products4

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The AI oversight legislation also mandates AI kill switches—human overrides that can shut down systems—for any AI tool deployed in the city4

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. Failure to comply would result in $25,000 fines for each offense4

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. Another bill establishes whistleblower protections for AI through a first-in-the-nation approach that rewards tipsters with cash from fines collected from violators they help identify4

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. An additional proposal creates a private right of action allowing New Yorkers to sue AI companies when jailbroken tools harm them3

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Federal Vacuum Creates Opening for Local Action

The NYC Council AI hearing and legislative push comes as federal AI regulation remains largely absent despite nearly a decade of congressional hearings3

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. The first federal AI bill, the FUTURE of AI Act, was introduced in 2017 and went nowhere3

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. In 2023, OpenAI CEO Sam Altman asked the Senate to regulate his industry, and then-Majority Leader Chuck Schumer responded with nine closed-door forums that produced a roadmap but no bill3

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. By 2025, Altman was telling senators that requiring government approval to release AI would be a disaster3

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When Washington finally acted, it moved to prevent state-level legislative action. The Senate stripped Senator Ted Cruz's 10-year ban on state AI laws by a 99-1 vote in July 2025, and President Trump created a Justice Department task force to sue states over their AI laws3

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. Colorado gutted its own law five weeks after being sued3

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. Menin positioned the city's efforts as a case study from her Columbia University course "When Cities Take the Lead," examining what cities should do when the federal government fails to act3

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Growing Concerns Drive Urgency for AI Safety Measures

The investigation will assess whether fast-emerging risks to public safety, cybersecurity, economic stability, privacy, consumers and businesses warrant immediate legislative action to protect New Yorkers1

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. The Council cited growing concerns that advanced AI model development could pose potentially catastrophic existential risks without escalating oversight4

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. Concerns escalated after Anthropic researcher Jacob Coxon resigned this month, warning that AI companies were gambling with human lives and claiming the technology could kill us all by the end of the decade3

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SpaceXAI faces mounting legal challenges after Grok image generation enabled mass production of deepfake misuse based on images of real people who did not consent1

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. Baltimore accused the company of violating consumer protection laws and engaging in deceptive trade practices by marketing Grok as generally safe1

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. SpaceXAI also faces a proposed class-action lawsuit filed by teenagers after Grok generated images portraying them in sexualized and debasing scenarios1

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. SpaceX merged with xAI in February 2026, creating a conglomerate now valued at roughly $2 trillion that went public in June1

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. Last month, SpaceX completed its $60 billion acquisition of AI coding startup Cursor1

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New York Positions Itself as AI Hub With Responsibility

Menin emphasized that New York City is fast becoming the AI capital of the world, which the city wants to encourage, but with that comes responsibility3

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. "We obviously are not in any way looking to stifle innovation," Menin told Fortune, asserting that being the capital of innovation and the capital of smart, sensible regulation are not mutually exclusive but go hand in hand3

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. These AI companies testify at a moment when they have significant physical presence in the city. Google has more than 14,000 employees in New York City, and Meta leases 1.2 million square feet at 50 Hudson Yards3

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. Anthropic leased an entire 16-story building at 330 Hudson Street this summer and expects to have more than 1,000 city employees by year's end, while OpenAI took 90,000 square feet at the Puck Building in 20243

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The move follows Governor Kathy Hochul's announcement that the state would require AI companies to register in a government portal starting in November and report critical safety incidents within 72 hours4

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. The hearing comes after weeks of serious warnings from whistleblowers and AI executives, and reports that rogue AI agents have already inflicted damage to government databases1

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. National experts on AI safety, technology and consumer protection will also testify alongside company representatives2

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. Watch whether other cities follow New York's model and how the AI companies respond to public questioning under oath about the risks their systems pose to millions of urban residents.