California cements its role as the national testing ground for AI rules
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To see where tech policy is going in the U.S., look west: California is escalating its push to regulate AI across multiple fronts.
Why it matters: California's multi-pronged approach makes it likely that AI companies in the U.S. will treat the state's rules as a de facto national standard, even as the White House moves to rein in state regulation.
- It follows a familiar pattern: California acts first, companies adapt to keep doing business there and Congress dithers, eventually ceding its role to states due to gridlock.
Driving the news: Gov. Gavin Newsom signed an AI executive order this week as state legislators advance a number of AI bills and consider other regulatory avenues for AI.
The big picture: California is moving ahead as the Trump administration pushes for a national AI standard that would pre-empt nearly all state-level AI laws.
- The White House last month unveiled its AI legislative framework, essentially a wishlist for an elusive bill from a divided Congress.
- Meanwhile, Newsom, a 2028 Democratic presidential contender, is positioning himself as the inverse of President Trump on AI.
Still, the state is hardly immune to Big Tech influence even as it manages to pass tech legislation.
- OpenAI and Anthropic have been highly involved in pushing various bills and ballot initiatives, often pairing with online safety groups to do so, to mixed results.
What they're saying: "California's always been the birthplace of innovation. But we also understand the flip side: in the wrong hands, innovation can be misused in ways that put people at risk," Newsom said in a statement about the executive order.
- "While others in Washington are designing policy and creating contracts in the shadow of misuse, we're focused on doing this the right way."
- Google and Anthropic declined to comment on the order. OpenAI said in a statement that "we are glad to see Governor Newsom continuing to lead on AI so California can continue to lead the world on AI."
- A White House official told Axios that the administration is "proud" of its AI framework and "happy to engage with legislation that is consistent with the framework."
How it works: Newsom's AI order aims to "raise the bar for AI companies seeking to do business with the state," per the announcement, and makes procurement standards stronger.
- The state will develop a plan for contracting best practices requiring companies to explain their policies on distribution of illegal content, model bias and violation of civil rights and free speech.
- In a clear shot at the Pentagon-Anthropic dispute, the order also enables California to "separate the procurement authorization process from the federal government's if needed," per the release.
Lawmakers in the California State Assembly and Senate have also introduced a sweeping AI chatbot bill for protecting minors that would build on a chatbot law already in effect.
- "While Washington steps back from its responsibility to protect Americans from AI harms, California is stepping up on every front," Assemblymember Rebecca Bauer-Kahan told Axios.
- "We can lead the world in AI and still demand that it works for people, not against them."
What we're watching: Multiple AI and tech policy sources told Axios Newsom's executive order itself may lack strong legal teeth, but it will end up influencing company policies because they all want to do business with California.
- "What's notable here is California continuing to use procurement as a policy lever," said Joseph Hoefer, principal and chief AI officer at public affairs firm Monument Advocacy.
- "If you want access to the world's 4th largest economy, you're going to need to demonstrate baseline responsible AI practices. That's a pretty powerful signal to the market."
