California governor vetoes controversial AI safety bill By Reuters

By David Shepardson and Anna Tong

WASHINGTON/SAN FRANCISCO (Reuters) – California Governor Gavin Newsom vetoed a highly controversial artificial intelligence security bill on Sunday after the tech industry raised objections, saying it could drive out artificial intelligence companies of the state and hinder innovation.

Newsom said the bill “does not take into account whether an ai system is deployed in high-risk environments, involves critical decision-making, or uses sensitive data” and would apply “strict standards to even the most basic functions, whenever a large system implements it.”

Newsom said he had asked leading generative ai experts to help California “develop viable guardrails” that focus “on developing empirical, science-based trajectory analysis.” It also directed state agencies to expand their assessment of the risks of potential catastrophic events related to the use of ai.

Generative ai, which can create text, photos and videos in response to open-ended prompts, has generated excitement and fears that it could make some jobs obsolete, disrupt elections and potentially overpower humans with catastrophic effects.

The bill's author, Democratic state Sen. Scott Wiener, said the legislation was necessary to protect the public before advances in ai became unwieldy or uncontrollable. The ai industry is growing rapidly in California and some leaders questioned the future of these companies in the state if the bill were to become law.

Wiener said Sunday that the veto makes California less safe and means that “companies seeking to create extremely powerful technology do not face binding restrictions.” He added that “voluntary industry commitments are not enforceable and rarely work well for the public.”

“We cannot afford to wait for a major catastrophe to occur before taking action to protect the public,” Newsom said, but added that he disagreed “we must settle for a solution that is not informed by an empirical analysis of the trajectory of ai systems and capabilities.”

Newsom said he will work with the legislature on ai legislation during its next session. It comes as legislation in the US Congress to establish safeguards has stalled and the Biden administration is advancing regulatory proposals for ai oversight.

Newsom said that “a California-only approach may well be justified, especially in the absence of federal action by Congress.”

The Progress Chamber, a tech industry coalition, praised Newsom's veto, saying that “California's tech economy has always thrived on competition and openness.”

Among other things, the measure would have required security testing for many of the most advanced ai models that cost more than $100 million to develop or those that require a defined amount of computing power. ai software developers operating in the state would also have needed to outline methods for turning off ai models, which would effectively be a kill switch.

The bill would have established a state entity to oversee the development of so-called “Frontier Models” that exceed the capabilities present in the most advanced existing models.

The bill faced strong opposition from a wide range of groups. Alphabet's Google (NASDAQ ), Microsoft-backed OpenAI and Meta Platforms (NASDAQ ), all of which are developing generative ai models, had expressed concerns about the proposal.

Some Democrats in the US Congress, including Representative Nancy Pelosi, also opposed it. Among the proponents was Tesla (NASDAQ ) CEO Elon Musk, who also runs an artificial intelligence company called xAI. Anthropic, backed by amazon, said the benefits of the bill likely outweigh the costs, although he added that There are still some aspects that seem worrying or ambiguous.

Newsom separately signed legislation requiring the state to evaluate potential threats generative ai poses to California's critical infrastructure.

The state is analyzing risks to previously convened energy infrastructure and electric sector suppliers and will conduct the same risk assessment with water infrastructure suppliers next year and later with the communications sector, Newsom said.

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