xAI loses legal challenge as California AI law forces data disclosure on training datasets

Musk fails to block California data disclosure law he fears will ruin xAI

Elon Musk's xAI has lost its bid for a preliminary injunction that would have temporarily blocked California from enforcing a law that requires AI firms to publicly share information about their training data. xAI had tried to argue that California's Assembly Bill 2013 (AB 2013) forced AI firms to disclose carefully guarded trade secrets. The law requires AI developers whose models are accessible in the state to clearly explain which dataset sources were used to train models, when the data was collected, if the collection is ongoing, and whether the datasets include any data protected by copyrights, trademarks, or patents. Disclosures would also clarify whether companies licensed or purchased training data and whether the training data included any personal information. It would also help consumers assess how much synthetic data was used to train the model, which could serve as a measure of quality. However, this information is precisely what makes xAI valuable, with its intensive data sourcing supposedly setting it apart from its biggest rivals, xAI argued. Allowing enforcement could be "economically devastating" to xAI, Musk's company argued, effectively reducing "the value of xAI's trade secrets to zero," xAI's complaint said. Further, xAI insisted, these disclosures "cannot possibly be helpful to consumers" while supposedly posing a real risk of gutting the entire AI industry. Specifically, xAI argued that its dataset sources, dataset sizes, and cleaning methods were all trade secrets. "If competitors could see the sources of all of xAI's datasets or even the size of its datasets, competitors could evaluate both what data xAI has and how much they lack," xAI argued. In one hypothetical, xAI speculated that "if OpenAI (another leading AI company) were to discover that xAI was using an important dataset to train its models that OpenAI was not, OpenAI would almost certainly acquire that dataset to train its own model, and vice versa."

xAI loses bid to halt California AI data disclosure law

March 5 (Reuters) - Elon Musk's artificial intelligence company xAI failed to convince a California federal court on Thursday to temporarily block the state's law requiring companies to disclose information about the data they use to train AI models. U.S. District Judge Jesus Bernal in Los Angeles said, opens new tab that xAI had not yet shown it was likely to prove the law ⁠violated its free-speech rights or was otherwise unconstitutional. Spokespeople for xAI and California's attorney general's office did not immediately respond to requests for comment on the ruling. California's law, enacted by Governor Gavin Newsom in September 2024, requires generative AI companies to publicly post a summary of the datasets used to train their systems. The data transparency law ⁠went into effect on January 1 this year, and is part of the state's broader push to regulate AI companies. xAI sued the state in December. It argued the law violated its ⁠free-speech rights under the U.S. Constitution and would force the company to reveal trade secrets about how its AI models ⁠are trained. Bernal on Thursday denied xAI's request for a preliminary injunction to halt the law's enforcement, finding the ⁠company had not shown at this stage in the case that its lawsuit was likely to succeed. Reporting by Blake Brittain in Washington; Editing by Aurora Ellis Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Constitutional Law * Intellectual Property * Public Policy * Data Privacy Blake Brittain Thomson Reuters Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets, for Reuters Legal. He has previously written for Bloomberg Law and Thomson Reuters Practical Law and practiced as an attorney.

XAI Loses Bid to Halt California AI Data Disclosure Law

March 5 (Reuters) - Elon ⁠Musk's ⁠artificial intelligence company ⁠xAI failed to convince a California federal court on Thursday to temporarily block the state's law requiring companies to disclose information about the data they use to train ⁠AI ⁠models. U.S. District Judge Jesus Bernal in Los Angeles said that xAI had not yet shown it was likely to prove the law violated its free-speech rights or was otherwise unconstitutional. Spokespeople for xAI and California's attorney general's ⁠office did ⁠not immediately respond to ⁠requests for comment on the ruling. California's law, enacted by Governor Gavin Newsom in ⁠September 2024, requires generative AI companies to publicly post a summary of the datasets used to train their systems. The data transparency law went into ⁠effect on January 1 this year, and is part of ⁠the state's broader push to regulate AI companies. xAI sued the state in December. It argued the law violated its free-speech rights under the U.S. Constitution and would force the company to reveal trade secrets about how its AI models are trained. Bernal on Thursday denied xAI's request for ⁠a preliminary injunction to halt the law's enforcement, finding the company had not shown at this stage in the case that its lawsuit was likely to succeed. (Reporting by Blake Brittain in Washington; Editing by Aurora Ellis)

XAI loses bid to halt California AI data disclosure law

March 5 (Reuters) - Elon Musk's artificial intelligence company xAI failed to convince a California federal court on Thursday to temporarily block the state's law requiring companies to disclose information about the data they use to train AI models. U.S. District Judge Jesus Bernal in Los Angeles said that xAI had not yet shown it was likely to prove the law violated its free-speech rights or was otherwise unconstitutional. Spokespeople for xAI and California's attorney general's office did not immediately respond to requests for comment on the ruling. California's law, enacted by Governor Gavin Newsom in September 2024, requires generative AI companies to publicly post a summary of the datasets used to train their systems. The data transparency law went into effect on January 1 this year, and is part of the state's broader push to regulate AI companies. xAI sued the state in December. It argued the law violated its free-speech rights under the U.S. Constitution and would force the company to reveal trade secrets about how its AI models are trained. Bernal on Thursday denied xAI's request for a preliminary injunction to halt the law's enforcement, finding the company had not shown at this stage in the case that its lawsuit was likely to succeed. (Reporting by Blake Brittain in Washington; Editing by Aurora Ellis)