⚖️ California passes AI Law

California Moves Ahead on AI Oversight

California’s legislature has passed SB 53, a sweeping AI safety bill that would require large AI companies to disclose their safety protocols, protect employee whistleblowers, and establish a state-run public cloud called CalCompute to expand access to computing resources. The bill, authored by Senator Scott Wiener, now awaits Governor Gavin Newsom’s decision. Newsom vetoed an earlier, broader version of the bill last year, but this version incorporates input from AI experts his office convened after that veto.

A Scaled Approach to Regulation

SB 53 attempts to balance ambition with pragmatism. Companies developing cutting-edge models but generating less than $500 million in revenue will only need to provide high-level disclosures, while larger firms must submit detailed reports. Supporters argue this scaling mechanism prevents the law from crushing smaller players while still holding industry leaders accountable. Critics, including OpenAI and Andreessen Horowitz, counter that state-by-state rules risk creating a patchwork that stifles innovation and could even cross constitutional limits on regulating interstate commerce.

Compliance Costs or Competitive Edge?

For founders, SB 53 could cut both ways. Startups under the $500 million threshold may find themselves relatively unburdened compared to Big Tech rivals forced into more rigorous reporting. That could level the playing field for challengers. At the same time, the bill foreshadows a future where compliance with multiple jurisdictions may become the cost of doing business in AI. Until federal rules arrive, startups should expect California’s law — if signed — to become a blueprint others follow, shaping the regulatory landscape they’ll have to navigate.

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