New York City lawmakers have proposed financial incentives for whistleblowers who report violations involving artificial intelligence companies, alongside a broader package of bills aimed at increasing oversight of AI systems operating in the city, Bloomberg noted.
The proposals are scheduled for discussion at an Oct. 5 Committee of the Whole hearing involving all 51 City Council members.
One measure sponsored by City Council Speaker Julie Menin would allow whistleblowers to receive a portion of fines or penalties recovered after they report AI-related violations. The proposal is intended to encourage employees and other insiders to disclose practices that breach applicable laws.
A separate bill would create a private right of action for people harmed by certain uses of AI, allowing them to sue developers under defined circumstances. The proposal addresses cases where harm was foreseeable and a company failed to put reasonable safeguards in place before a third party exploited weaknesses in an AI system.
NYC considers outside reviews and AI kill switches
Another proposal would require third-party validation before covered AI systems are marketed, offered for sale or deployed in New York City. Reviews would examine areas including data quality, bias, privacy, security and system outputs.
Covered systems would also need a human-controlled mechanism capable of shutting them down. Other measures under consideration would establish privacy, security and transparency requirements for chatbot providers, with enforcement handled at the city level.
The proposals arrive as city officials examine whether existing state and federal rules provide sufficient protection as more advanced AI systems enter commercial use. Menin said New York wants to encourage technology and AI development while putting safeguards in place for residents.
Full City Council hearing scheduled for Oct. 5
Menin has requested participation from Anthropic CEO Dario Amodei, OpenAI CEO Sam Altman, Google CEO Sundar Pichai, Elon Musk and Meta CEO Mark Zuckerberg at the Oct. 5 hearing. The Council has said participation is expected and retains subpoena authority if necessary.
The hearing will use the Committee of the Whole format, bringing together all 51 council members to examine AI risks and possible regulatory measures. The Council has described the session as an opportunity to assess whether additional city-level rules are needed as AI systems become more widely deployed.
The legislative package puts responsibility on both AI providers and people working inside the industry. Whistleblower payments would create a financial incentive to report violations, while private lawsuits, independent reviews and human shutdown controls would expand the legal and operational requirements facing companies offering AI products in New York City.
