WASHINGTON, D.C. — The Biden administration unveiled a sweeping new legislative proposal on Tuesday aimed at regulating the development and deployment of artificial intelligence technologies, a move that has already begun to ripple through U.S. equity markets, particularly in the technology sector. The proposed 'Artificial Intelligence Accountability Act' seeks to establish a federal oversight body tasked with ensuring transparency, data privacy, and ethical standards across AI applications. The legislation would require companies developing AI models above a certain scale to register with a new federal agency, undergo risk assessments, and disclose key data sources. It also includes provisions for civil penalties in cases of non-compliance. "This bill is about making sure AI technologies are safe, fair, and accountable without stifling innovation," said Commerce Secretary Gina Raimondo, who played a key role in drafting the legislation. "We believe this framework provides the certainty businesses need while protecting the public interest." However, investor sentiment was mixed following the announcement. The Nasdaq Composite, heavily weighted with tech companies, dipped by 1.3% in afternoon trading. Shares of AI-heavy firms such as Nvidia (NASDAQ: NVDA), Palantir (NYSE: PLTR), and C3.ai (NYSE: AI) all saw declines of between 2% and 4% as analysts began digesting the potential compliance costs and operational hurdles posed by the bill. "While the regulatory clarity is welcome in the long term, the near-term uncertainty could weigh on margins and slow product rollouts," said Emily Chang, a senior analyst at Morgan Stanley. "Investors are recalibrating growth expectations, especially for smaller AI startups that may not have the resources to meet these new requirements." The bill is expected to face fierce debate in Congress, where some lawmakers argue it may go too far in restricting innovation. Others support the initiative, citing growing public concern over AI’s role in surveillance, employment, and misinformation. Meanwhile, corporate earnings from several tech giants are due this week, with Alphabet and Microsoft set to report on Thursday. Analysts will be closely watching for any commentary on regulatory risks and how companies plan to adapt to shifting policy landscapes. If passed, the legislation could set a global precedent for AI governance, as other countries look to the U.S. for leadership in tech policy. For now, market watchers are bracing for a period of heightened volatility as the political and financial implications of the bill unfold.