(Adds comments from Anthropic, Elon Musk in paragraphs 17-20)

By Greg Bensinger

SAN FRANCISCO, Aug 27 (Reuters) - California legislators

are set to vote on a bill as soon as this week that would

broadly regulate how artificial intelligence is developed and

deployed in California even as a number of tech giants have

voiced broad opposition.

Here is background on the bill, known as SB 1047, and why it

has faced backlash from Silicon Valley technologists and some

lawmakers:

WHAT DOES THE BILL DO?

Advanced by State Senator Scott Wiener, a Democrat, the

proposal would mandate safety testing for many of the most

advanced AI models that cost more than $100 million to develop

or those that require a defined amount of computing power.

Developers of AI software operating in the state would also need

to outline methods for turning off the AI models if they go

awry, effectively a kill switch.

The bill would also give the state attorney general the

power to sue if developers are not compliant, particularly in

the event of an ongoing threat, such as the AI taking over

government systems like the power grid.

As well, the bill would require developers to hire

third-party auditors to assess their safety practices and

provide additional protections to whistleblowers speaking out

against AI abuses.

WHAT HAVE LAWMAKERS SAID?

SB 1047 has already passed the state Senate by a 32-1 vote.

Earlier this month, it passed the state Assembly appropriations

committee, setting up a vote by the full Assembly. If it passes

by the end of the legislative session on Aug. 31, it would

advance to Governor Gavin Newsom to sign or veto by Sept. 30.

Wiener, who represents San Francisco, home to OpenAI and

many of the startups developing the powerful software, has said

legislation is necessary to protect the public before advances

in AI become either unwieldy or uncontrollable.

However, a group of California Congressional Democrats

oppose the bill, including San Francisco's Nancy Pelosi; Ro

Khanna, whose congressional district covers much of Silicon

Valley; and Zoe Lofgren, from San Jose.

Pelosi has called SB 1047 ill-informed and said it may cause

more harm than good. In an open letter last week, the Democrats

said the bill could drive developers from the state and threaten

so-called open-source AI models, which rely on code that is

freely available for anyone to use or modify.

WHAT DO TECH LEADERS SAY?

Tech companies developing AI - which can respond to prompts

with fully formed text, images or audio as well as run

repetitive tasks with minimal intervention - have called for

stronger guardrails for AI's deployment.

They have cited risks that the software could one day evade

human intervention and cause cyberattacks, among other concerns.

But they also largely balked at SB 1047.

Wiener revised the bill to appease tech companies, relying

in part on input from AI startup Anthropic - backed by Amazon ( AMZN )

and Alphabet. Among other changes, he

eliminated the creation of a government AI oversight committee.

Wiener also took out criminal penalties for perjury, though

civil suits may still be brought.

The revised bill has won support from some tech firms and

executives, including billionaire Elon Musk and Anthropic.

The AI startup had last week said its concerns about the

bill potentially hindering innovation had been "greatly reduced"

and the benefits likely outweighed the costs.

Still, it flagged that some aspects of the bill seemed

concerning or ambiguous.

Tesla CEO Musk, who runs an AI firm called xAI, said he has

been an advocate for AI regulation and that California should

pass the bill.

Other companies have opposed it.

Alphabet's Google and Meta have expressed

concerns in letters to Wiener. Meta said the bill threatens to

make the state unfavorable to AI development and deployment. The

Facebook parent's chief scientist, Yann LeCun, in a July X post

called the bill potentially harmful to research efforts.

OpenAI, whose ChatGPT is credited with accelerating the

frenzy over AI since its broad release in late 2022, has said AI

should be regulated by the federal government but that SB 1047

creates an uncertain legal environment.

In a letter to Wiener, OpenAI said it opposes SB 1047

because it is a threat to AI's growth and could cause

entrepreneurs and engineers to leave the state.

Of particular concern is the potential for the bill to apply

to open-source AI models. Many technologists believe open-source

models are important for creating less risky AI applications

more quickly, but Meta and others have fretted that they could

be held responsible for policing open-source models if the bill

passes. Wiener has said he supports open-source models and one

of the recent amendments to the bill raised the standard for

which open-sourced models are covered under its provisions.

The bill also has its backers in the technology sector.

Geoffrey Hinton, widely credited as a "godfather of AI", former

OpenAI employee Daniel Kokotajlo and researcher Yoshua Bengio

have said they support the bill.