California Gov. Gavin Newsom announced yesterday that he has vetoed a proposed state law that would have established strict requirements on the development and deployment of artificial intelligence systems. Senate Bill 1047 would have required AI developers to test and establish safeguards to mitigate potential harm caused by the technology. It also would have established a new government entity to oversee AI deployment. The law would have been the first of its kind in the nation.
In his veto message, Newsom said that while well-intentioned, the bill did not take into account whether an Al system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data. “Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it,” he said. However, Newsom noted that over the past month, he had signed into law 17 bills covering the deployment of generative AI technology, including new penalties for the distribution of deepfakes.
AI was a top concern for state lawmakers across the U.S. in 2024, with the National Association of State Legislatures reporting that at least 25 states have taken up proposed legislation concerning the technology. In a joint letter with 21 state bankers associations in August, the American Bankers Association pointed to the large number of proposed state law concerning AI and urged the U.S. Treasury Department to clarify that horizontal federal law preempts state requirements and clearly excludes banks from any duplicative obligations.
