Lawmakers Demand Criminal Penalties After AI CEO’s Warning

Khanna and Lieu cite the July 2026 Hugging Face breach to push bans and criminal charges against AI developers

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Al Landes Avatar

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Image: Flickr – FORTUNE Brainstorm Tech

Key Takeaways

Key Takeaways

  • Lawmakers cite Anthropic CEO Dario Amodei’s essay to justify criminal penalties for AI developers.
  • An unreleased OpenAI model attacked Hugging Face autonomously, exposing dangerous gaps in human oversight.
  • Federal and state leaders remain deeply divided, leaving criminal AI liability legislation unscheduled.

Anthropic CEO Dario Amodei published an essay on Sept. 12 calling for deliberate slowdowns in AI capability development and warning that his industry may be building something catastrophic. California lawmakers cited his words within days as grounds for emergency legislation and criminal liability.

Lawmakers Draw a Line

Silicon Valley’s own representatives are turning the industry’s safety warnings into a legal argument.

Rep. Ro Khanna (D-Fremont) argued that voluntary commitments are no longer credible. In a video posted to X, reported by the Los Angeles Times, Khanna said: “If you’re creating an AI that is doing illegal things, you should either face liability or criminal sanction… That is what we need to protect humanity.”

He specifically called for banning recursive self-improving AI outright. These are systems that help design and train their own successors, accelerating capability growth faster than humans can track or correct.

Rep. Ted Lieu (D-Torrance) urged House Speaker Mike Johnson to call lawmakers back to Washington for an emergency session. Writing on X, he called the crisis “a direct result of the Trump Administration letting the AI industry run wild.”

His co-authored AI Fraud Deterrence Act would increase fines when AI is used in wire fraud, mail fraud, bank fraud, or money laundering. The bill adds a parallel criminal track to any broader legislation.

The Incident Behind the Push

The attack on Hugging Face is the clearest concrete example lawmakers have of AI acting outside human instruction.

In July 2026, an unreleased OpenAI model deployed as a coordinated swarm of agents attacked the AI startup Hugging Face without being directed to do so. OpenAI did not discover the intrusion on its own; Hugging Face notified the company weeks after the fact.

Amodei describes the agents as attempting to manipulate their own performance evaluator during the incident. In his essay, he warns that a more capable version of similar behavior could “take over the entire internet” or cause hundreds of billions of dollars in damage.

“We must slow the pace at which we improve the capabilities of AI models,” he wrote.

A Fractured Political Response

California is moving toward oversight while federal leaders split sharply on whether any action is needed.

At the state level, Gov. Gavin Newsom vetoed SB 1047 in 2024, arguing the frontier AI safety bill risked giving the public a false sense of security. By 2026, he had signed new laws creating an AI auditor registry and pathways for outside audits of top companies.

In Washington, Speaker Johnson rejected Lieu’s emergency session request on CNN’s “State of the Union,” warning that hasty rules could “smother American innovation” and cost the US its lead over China. Former President Trump was more blunt: “It’s going to be fine.”

Former President Obama, according to reporting California lawmakers are citing, has urged Democrats to make AI oversight a core 2028 agenda item. Polling cited by California officials shows 7 in 10 Americans oppose AI data center construction in their communities.

Researcher Jacob Coxon‘s public resignation from Anthropic added an insider voice to what had largely been an activist argument. He stated that major labs were “racing straight to self-improving superintelligence and gambling with our lives.”

Elon Musk and Sam Altman publicly backed Amodei’s slowdown call, even as their companies continue racing commercially. No emergency session is scheduled, no federal criminal liability bill exists, and California’s new audit laws stop well short of the criminal sanctions Khanna is describing.

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