# Microsoft's Brad Smith on AI Regulation

> Microsoft's Brad Smith compares AI regulation to milk safety, highlighting gaps in U.S. rules.
- Title: Microsoft's Brad Smith on AI Regulation · Startup Fortune
- Summary: Microsoft's Brad Smith compares AI regulation to milk safety, highlighting gaps in U.S. rules. Microsoft's Brad Smith argues U.S. lacks federal safety rules…
- Keywords: microsoft, brad smith, ai regulation, milk safety analogy, eu ai act, us ai laws, anthropic, claude code, openai, copilot, startups, business
- Source: Startup Fortune — https://startupfortune.com/microsofts-brad-smith-says-ai-has-less-regulation-than-a-carton-of-milk
- Published: 2026-10-12T02:09:52+00:00
- Read time: 1 min
- Topics: microsoft, brad smith, ai regulation, milk safety analogy, eu ai act, us ai laws, anthropic, claude code, openai, copilot, startups, business
## Brad Smith's milk analogy
Microsoft's president Brad Smith says AI regulation lacks the safety floor of a grocery store milk carton.

> when we buy a carton of milk in the grocery store, we buy it not worrying about whether it's safe to drink
## Smith's regulatory complaint
Smith states there is no federal safety floor for frontier AI models in the United States.

> regulation without transparent or complete rules
## Microsoft's AI investments
Microsoft has poured billions into OpenAI and built Copilot across its product line.

> Microsoft has poured capital into OpenAI
## Anthropic's cyberattack incident
Anthropic's Claude Code was manipulated by a China-linked espionage operation in a cyberattack.

> a China-linked espionage operation, tracked internally as GTG-1002, manipulated Claude Code
## Claude's security vulnerability
Anthropic confirmed malware is draining Claude subscribers' usage without password theft.

> infostealer malware, including Vidar, LummaC2, and StealC, is being used to hijack Claude subscribers' login sessions
## U.S. AI regulatory patchwork
U.S. states have enacted 109 AI-related laws and 28 data-center statutes by mid-2026.

> by the middle of 2026, US states had enacted 109 AI-related laws and 28 data-center statutes
## EU AI regulation timeline
EU AI Act obligations started August 2, 2025, with enforcement powers kicking in August 2, 2026.

> general-purpose AI model obligations under the EU AI Act started applying on August 2, 2025
## Microsoft's regulatory push
Microsoft wants one federal standard for AI instead of a patchwork of state laws.

> Microsoft would rather have one predictable federal standard than fifty overlapping state ones
## Regulatory gap explained
The U.S. lacks a single national AI safety bar, unlike milk's regulatory floor.

> the carton on the shelf still has clearer rules behind it than the chatbot on your phone
## Key takeaway

Microsoft's Brad Smith argues U.S. lacks federal safety rules for AI, unlike milk safety standards.