California backs down on AI laws so more tech leaders don’t flee the state

California’s tech companies, the epicenter of the state’s economy, sent politicians a loud message: Back down from restrictive artificial intelligence regulation or they’ll leave. The tactic appeared to have worked, activists said, because some politicians weakened or scrapped guardrails to mitigate AI’s biggest risks. Gov. Gavin Newsom (D-CA) rejected a bill aimed at making companion chatbots safer for children after the tech industry fought it. In his veto message, the governor raised concerns about placing broad limits on AI, which has sparked a massive investment spree and created new billionaires overnight around the San Francisco Bay Area. Assembly Bill 1064 would have barred companion chatbot operators from making these AI systems available to minors unless the chatbots weren’t “foreseeably capable” of certain conduct, including encouraging a child to engage in self-harm. Gov Newsom said he supported the goal, but feared it would unintentionally bar minors from using AI tools and learning how to use technology safely. The bill’s veto was a blow to child safety advocates who had pushed it through the state Legislature and a win for tech industry groups that fought it. In social media ads, groups such as TechNet had urged the public to tell the governor to veto the bill because it would harm innovation and lead to students falling behind in school.