California bill puts new guardrails on local AI developers, which is most of them

Andrew Romero | Oct 8 2025 - 8:22 am PT

AI companies in California are getting a tighter leash with a new open-ended bill that aims to add some restraints to how the new business model category can operate in the state. The bill affects a large majority of AI development companies.

California Governor Gavin Newsom signed the “Transparency in Frontier Artificial Intelligence” SB 53 bill into law recently, which aims to restrain companies that develop AI. The “AI company” has only recently begun picking up speed as LLMs and other models have taken a massive recent jump in usability. Companies like OpenAI and Perplexity AI have suddenly become household names, while existing giants like Google have dumped substantial amounts of money into in-house development.

The bill aims at setting up a system that requires AI development firms to publicly publish information on how they meet national and international standards. They’re also required to disclose how “industry-consensus” best practices are incorporated.

The bill also calls for a new government consortium to “develop a framework for creating a public computing cluster.”

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The consortium, called CalCompute, will advance the development and deployment of artificial intelligence that is safe, ethical, equitable, and sustainable by fostering research and innovation.

These companies will also reportedly be subject to a reporting system that allows the public and/or the company itself to report safety incidents to California’s Emergency Services office. Those who report significant health and safety risks regarding models being developed will be further protected, and civil penalties are enforceable by the Attorney General’s office.

His Administration’s partnership helped this groundbreaking legislation promote innovation and establish guardrails for trust, fairness, and accountability in the most remarkable new technology in many years.

These requirements are subject to change on a regular basis as industry standards change.

The press release for California’s new AI bill notes that 32 of the top 50 AI companies (according to Forbes) are located in California, which would mean a hefty portion of them are subject to these new requirements. The referenced list seems to leave out companies like Google that have begun developing AI models, though they wouldn’t be classified as solely an “AI development company.” The bill references “frontier model development,” which would extend to include businesses such as Apple, Google, and Nvidia – all located in California.