The Reality Behind the

RAISE Act

New York’s RAISE Act creates serious concerns about innovation, investment, and the future of AI development in New York. Below, we break down the myths and lay out the facts so you can decide for yourself what’s at stake.

MYTH:	FACT:
The RAISE Act is a low-cost, proactive step to protect the public.	Compliance could require extensive documentation, reporting, and external review, burdens that smaller companies are least equipped to absorb. This shifts the playing field in favor of large incumbents and could push emerging AI talent out of New York.
MYTH:	FACT:
The compute-cost threshold ensures only major developers are regulated.	The law will subject startups to the same burdens as Big Tech. The law includes a $100 million training cost threshold, but those costs are calculated over the entire life of a company and include all of the research a company devotes to building it. So every startup will eventually be covered. As AI training becomes more efficient and collaborative, more organizations— including startups, research labs, and smaller developers—could easily reach this level. The law also applies to distilled models that cost just $5 million to produce if they originate from a larger system, sweeping in a broader swath of the ecosystem than the headline suggests.
MYTH:	FACT:
The RAISE Act promotes responsible innovation by ensuring AI safety measures are in place.	Overregulation discourages innovation and slows down responsible innovation. Investors are more likely to fund companies in jurisdictions that balance safety with speed and scalability. This bill could drive talent and capital elsewhere, particularly in states where existing laws apply to the harmful use of AI.
MYTH:	FACT:
New York can pass any law to fill a federal gap while Washington catches up.	The Constitution gives broad authority to regulate AI, but it gives Congress the lead role in regulating interstate commerce in AI. State-level AI regulation risks a fragmented national landscape, making it harder for developers to build responsibly and consistently. A patchwork of standards could stifle interstate commerce and penalize New York-based companies trying to compete in other states and globally.
MYTH:	FACT:
The RAISE Act is necessary because New York failed to regulate social media effectively.	AI is not social media. Unlike social media, AI development is still growing and diverse in its applications. Premature regulation based on hypothetical harms could block high-impact use cases in areas like healthcare, education, and climate research before they even begin. And even without a change in the law, New York’s existing consumer protection, civil rights, and criminal laws can be enforced in cases involving AI.
MYTH:	FACT:
AI companies refuse to self- regulate, so government- mandated safety plans are necessary.	Many AI developers already follow internal safety protocols and collaborate with external researchers. The RAISE Act duplicates existing safeguards but adds bureaucracy that slows responsible development.
MYTH:	FACT:
This law will safeguard kids and communities before AI causes real harm.	The law will have little impact on the safety of kids or consumers. Its focus is making it harder for developers to build AI models, which will simply hand a large percentage of the emerging AI market to entrenched tech companies.
MYTH:	FACT:
The AI industry refuses to be regulated in any way that could jeopardize its profits.	Many AI companies actively support smart, targeted regulation that ensures safety without stifling innovation. What they oppose are sweeping rules designed for a select few that impose crushing costs on startups and entrench the dominance of the largest players. Fair rules should level the playing field, not lock out the next generation of innovators.