California’s AI bill is dead in the water – and big tech can breathe a sigh of relief

California governor Gavin Newsom has returned SB 1047 without his signature, vetoing the proposed AI bill that divided the tech community.

In a letter addressed to the California State Senate, Newsom outlined his concerns surrounding the legislation, criticizing the bill for lacking nuance in its application and for focusing too heavily on larger models.

“While well-intentioned, SB 1047 does not take into account whether an Al system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data,” Newsom wrote.

The bill applies “stringent standards to even the most basic functions,” Newsome added, provided these basic functions are delivered by a large system. He said the bill’s focus on these larger, more expensive models could give the public a “false sense of security” about the legislation’s ability to control AI.

“Smaller, specialized models may emerge as equally or even more dangerous than the models targeted by SB 1047 – at the potential expense of curtailing the very innovation that fuels advancement in favor of the public good,” he said.

While Newsom noted the importance of legislation, he was adamant that the solution for AI be empirically informed and able to evolve at the same speed as the fast-moving technology.

“Let me be clear – I agree with the author – we cannot afford to wait for a major catastrophe to occur before taking action to protect the public. California will not abandon its responsibility,” Newsom said.

“I do not agree, however, that to keep the public safe, we must settle for a solution that is not informed by an empirical trajectory analysis of Al systems and capabilities. Ultimately, any framework for effectively regulating Al needs to keep pace with the technology itself,” he added.

Newsom said he remains committed to working with the Legislature, federal partners, and tech and AI experts to find a path forward – given the height of the stakes, “we must get this right,” Newsom said.

Big tech dodges a bullet

SB 1047 has been a divisive bill in the tech community and there are certainly a few major players who will be glad to see the back of it.

In August 2024, the senator behind the bill – Scott Weiner – announced amendments to the legislation based on comments from Anthropic which included changing criminal charges to civil ones for perjury.

Bruna de Castro e Silva, AI governance specialist at Saidot, told ITPro at the time that these amendments advanced the corporate interests of big tech and undermined AI governance.

Despite these changes, the tech community still had issues with the bill. OpenAI’s chief strategy officer Jason Kwon said that SB 1047 would threaten growth and slow innovation in a letter obtained by Bloomberg.

There is no comprehensive legislation for the technology currently in place across the US, and the death of this bill marks a major setback for AI regulation at large, according to CreateFuture’s CTO Jeff Watkins.

“By vetoing the bill, the opportunity to hold developers accountable for AI risks has been removed (at least until an acceptable revision or alternate bill comes along), which could lead to societal harm,” Watkins told ITPro.

“The bill also represented a more proactive approach to regulating AI development, meaning the alternative could end up being a more reactive stance to address AI harms after they have already occurred,” Watkins added.

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