Big Tech just notched a huge win in California with an AI-bill veto

• On Sunday, Gov. Gavin Newsom of California vetoed an artificial-intelligence-safety bill.
• The bill aimed to create safety measures for companies spending $100 million on AI training.
• Newsom cited concerns about stifling innovation since California dominates AI development.

Gov. Gavin Newsom of California on Sunday vetoed an AI-safety bill , a win for artificial-intelligence heavyweights like OpenAI and Big Tech companies that lobbied against it.

The bill, SB 1047, was introduced earlier this year by Sen. Scott Wiener, a state lawmaker, and passed the California State Assembly last month. It aimed to force the development of safety measures at companies that spend $100 million or more training AI models so their tech could not be used to harm society — a loose definition that the bill said could include creating dangerous weapons or undertaking cyberattacks.

"This veto is a setback for everyone who believes in oversight of massive corporations," Wiener said Sunday in a statement.

About two weeks ago, Newsom said that he was concerned the bill could have a "chilling effect" on AI development. He said he didn't want California to lose its dominance in AI.

"The bill applies stringent standards to even the most basic functions — so long as a large system deploys it," the governor said Sunday in a statement. "I do not believe this is the best approach to protecting the public from real threats posed by the technology."

The now killed bill also would have required companies operating in California to report any safety incidents stemming from their AI products to the government. It would have protected company whistleblowers and allowed third parties to test models for safety. The bill said that if necessary, developers should be able to fully shut down their AI tools.

The debate in California reflects the challenge governments face in walking the fine line between allowing tech companies to innovate and protecting against new risks. Newsom may also want to signal that the state is open for business after a string of high-profile company exits, including those of Chevron, Tesla, Oracle, Charles Schwab, and CBRE .

In a release announcing the veto, Newsom's office also said the governor signed 17 bills over the past month relating to generative AI, which cracked down on deepfakes and misinformation and aimed to protect children and employees.

Relief to opponents

Newsom's veto will come as a relief to many in Silicon Valley who had criticized the bill and said it would hurt innovation.

Meta's vice president of policy, Rob Sherman, praised Newsom for rejecting the bill. In an X post on Sunday, he said the bill would have "hurt business growth and job creation, and broken the state's long tradition of fostering open-source development."

Marc Andreessen, a general partner at the venture-capital firm Andreessen Horowitz, applauded Newsom's decision, too. In a statement on X, he said the veto sided with California's growth and freedom over "safetyism, doomerism, and decline."

Jason Kwon, OpenAI's chief strategy officer , said in an August letter to Wiener that the bill could stifle progress and drive companies out of California.

The ChatGPT maker joined the tech giant Meta in lobbying against the bill. Meta said the bill could discourage the open-source movement by exposing developers to significant legal liabilities.

Andreessen Horowitz cited similar innovation concerns and paid for a petition campaign against the bill.

To be sure, not all of Big Tech opposed the bill.

Elon Musk, who founded the AI company xAI last year, said last month that though it was " a tough call and will make some people upset ," he thought "California should probably pass the SB 1047 AI safety bill."

Anthropic CEO Dario Amodei seemed to have mixed feelings amid the debate. In August, he said that the bill's "benefits likely outweigh the costs." He added: "However, we are not certain of this, and there are still some aspects of the bill which seem concerning or ambiguous to us."

Several former OpenAI employees also supported the safety bill and said OpenAI's opposition to the bill was disappointing.

"We joined OpenAI because we wanted to ensure the safety of the incredibly powerful AI systems the company is developing," two former OpenAI researchers, William Saunders and Daniel Kokotajlo, wrote in the letter. "But we resigned from OpenAI because we lost trust that it would safely, honestly, and responsibly develop its AI systems."