As the Trump administration continues to roll back federal AI oversight, California Governor Gavin Newsom has moved in the opposite direction, signing an executive order aimed at raising the bar for artificial intelligence companies that want to do business with the state.
The order, announced March 30, directs California’s Government Operations Agency to develop new procurement standards that would require AI vendors to demonstrate responsible policies and meet rigorous privacy and security benchmarks before securing state contracts. It also doubles down on the state’s commitment to deploying AI responsibly within its own operations — a sharp contrast to what Newsom’s office describes as mounting federal missteps.
“California’s always been the birthplace of innovation,” Newsom said. “But we also understand the flip side: in the wrong hands, innovation can be misused in ways that put people at risk. California leads in AI, and we’re going to use every tool we have to ensure companies protect people’s rights, not exploit them or put them in harm’s way. While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way.”
What the Order Does
The executive order tasks the Government Operations Agency with creating vetting processes that assess AI companies on how clearly they explain — and enforce — safeguards against several specific risks, including the distribution of illegal content, algorithmic bias, and violations of civil rights and free speech.
The order also gives California the authority to decouple its procurement authorization process from the federal government’s if circumstances require it — a notable provision that signals the state’s willingness to operate entirely independently on AI policy.
On the deployment side, Newsom announced a new AI-powered tool designed to help Californians navigate state programs and benefits based on life events, such as starting a business or searching for a job. The initiative is part of a broader push to use generative AI to make state services more accessible and efficient.
In a first-of-its-kind move nationally, the order also directs the California Department of Technology to develop recommendations and best practices for watermarking AI-generated images and manipulated video, consistent with existing state law.
Engaging Californians on AI’s Workforce Impact
Alongside the procurement measures, Newsom announced an expansion of Engaged California — the state’s digital democracy platform — to gather public input on how AI is reshaping the workforce. The statewide engagement effort, described as a first of its kind nationally, will roll out in the coming months and is intended to give Californians a direct voice in shaping the state’s AI policy response.
The platform was previously piloted at the local level to support recovery efforts following the Los Angeles wildfires and to gather feedback from state employees on government efficiency initiatives.
California’s AI Position
The announcement underscores California’s standing as the dominant force in the global AI economy. The state is home to 33 of the top 50 privately held AI companies worldwide, accounts for 25% of all AI patents, conference papers, and companies, and attracted 51% of all U.S. AI startup funding on Carta’s platform between Q3 2024 and Q2 2025 — dwarfing New York (11%) and Boston (5.5%).
California also leads U.S. demand for AI talent, with 15.7% of all domestic AI job postings in 2024, and is home to three of the four companies to surpass a $3 trillion valuation: Google, Apple, and Nvidia.
The state already has a substantial legal framework around AI, covering areas including frontier model development, deepfake regulation, child safety protections, performer likeness rights, and AI-generated robocall scams. Newsom’s latest order builds on that foundation while positioning California as an explicit counterweight to what his administration views as federal abdication on AI accountability.
