Illinois AI regulations have mild industry support, could draw federal ire

By Sean Reed | The Center Square
The Center Square

(The Center Square) – Experts in artificial intelligence spoke to state lawmakers recently, providing guidance on four bills introduced in the House, which would regulate and unlock legal remedies against AI companies, platforms and products.

The new legislation may bring more federal scrutiny to Illinois if lawmakers pass the bills.

A repeated point of contention for the proposed regulations was the patchwork of legislation varying state-to-state stifles innovation nationwide.

In December 2025, President Donald Trump signed an executive order to prevent such a patchwork. The order created an AI Litigation Task Force under the U.S. attorney general, directed to challenge AI regulatory laws.

The order also urged Congress to regulate AI at the federal level, providing uniform guidance for tech companies.

PUBLIC SAFETY AND CHILD PROTECTION

House Bill 4705 is the Artificial Intelligence Public Safety and Child Protection Transparency Act.

State Rep. Daniel Didech, D-Buffalo Grove, said his bill will provide guardrails to AI companies in an effort to manage risks the platforms may present to public safety.

“With this legislation Illinois would break new ground in three important ways. One, on child safety requirements for chatbots; two, whistleblower protections; and three, third party independent auditing,” Didech said.

The lawmaker said multiple children have committed suicide with both encouragement and direction from AI chatbots.

Anthropic, the company behind the chatbot ‘Claude,’ is in favor of the regulation, according to James Hartmann, regional state and local government affairs lead for the company.

“When it comes to AI transparency, we believe that AI companies at the very forefront – companies like Anthropic – should work with the state governments like Illinois on three reasonable things,” Hartmann said.

He said companies and states should disclose their safety framework, disclose safety assessment findings and report incidents to state authorities.

SURVEILLANCE PRICING

House Bill 5756, the Algorithmic Pricing Transparency Act, would regulate companies selling products based on algorithmic pricing, requiring transparency to consumers and the ability to opt out.

Bill sponsor, Rep. Maura Hirschauer, D-West Chicago, said the bill won’t have an impact on tactics like dynamic pricing and coupon or discount programs.

“If companies are using your data to set your price, you deserve to know you deserve a choice and to be treated fairly,” Hirschauer said.

The Economic Security Project Action opposed the bill because they feel it doesn’t go far enough to protect consumers, according to Illinois director of policy and research Erion Malasi.

“Our coalition is excited to see the house take this issue up in earnest and we really look forward to more fruitful discussions with advocates and business leaders,” Malasi said.

State Rep. Rita Mayfield, D-Waukegan, supported the bill but said she agrees with Malasi, the practice of surveillance pricing shouldn’t be allowed.

GENERATIVE AI IN ELECTIONS

House Bill 4557, the Digital Forgeries in Politics Act, prevents some use of generative AI by campaigns and regarding elections.

The bill restricts the use or creation of AI generated ‘deepfakes,’ – images, videos or audio generated by AI – to curb misinformation about candidates.

Andrew Elliott, an attorney for the Motion Picture Association, MPA, said they support the effort to protect integrity of elections, but want the bill amended to protect broadcasters, media and satirical works.

“A state law coming in to regulate such conduct has to focus liability on the creator of the advertisement and not the distributor,” Elliott said.

CHATBOT HARM LIABILITY

House Bill 5044, the Chatbot Provider Liability Act, creates new paths to legal relief from companies that operate chatbots if harm is done to a user. As introduced, the bill doesn’t define what constitutes harm.

Ashley Hokenson, deputy attorney general for policy, said the Illinois Attorney General’s Office has reviewed real-life examples of harm done by false information provided by chatbots, which is why they support the bill.

“Companies must be held responsible for the design and marketing of their products that clearly can and are having a real and sometimes drastic impact on users. They should be responsible for ensuring their products are safe and appropriate for users,” Hokenson said.

Zach Kahn with American Innovators Network said his organization is against the bill because state-by-state standards may harm startups while favoring big tech companies.

Rep. Didech scrutinized Kahn’s point, providing an analogy to explain why he thinks the basic safety protections are important.

“If you’re manufacturing a car, you have to put seat belts in the car. It doesn’t matter if you’re the biggest car manufacturer in Illinois or the smallest car manufacturer in Illinois. Those are things that are scientifically proven to save people’s lives,” Didech said. “Why should we treat these AI chatbots differently?”

Kahn clarified he agrees core safety regulations are important, but strict and broad liability could harm small tech companies disproportionately.