One person stands between Silicon Valley and a banner year in Sacramento

SACRAMENTO, California — Sacramento’s ambitions of reining in tech just collided with political reality.

Legislators entered the year determined to act on artificial intelligence and social media. California’s homegrown technology industry responded by flexing its lobbying muscles, beating back much of Democrats’ regulatory agenda by diluting and sidelining bills meant to protect kids from social media, root out biased algorithms and divert some of platforms’ profits toward journalists.

Now they want to finish the job by persuading Gov. Gavin Newsom, a longtime industry ally who has touted AI’s economic potential , to kill off a nationally watched AI safety bill that Silicon Valley opponents deride as a damper on a promising and rapidly growing sector. He has until Sept. 30 to sign or veto the measure.

The fight now before Newsom over San Francisco Democrat Sen. Scott Wiener’s bill caps a year in which technology issues dominated Sacramento’s agenda, attracting heavy lobbying from major players like Google, Meta, Amazon and OpenAI. Democratic lawmakers in the state argued California had the political will and the responsibility to curb the hazards emanating from untrammeled social media platforms and artificial intelligence systems emerging in its backyard, acting where Congress had failed.

But the outcome of those bills was equally important to California-based tech titans who understand that whatever Sacramento does will both affect their in-state operations and could ripple out to Washington. In the nation’s premiere battleground for tech policy, the industry demonstrated its continued ability to overwhelm lawmakers with its deep pockets and political clout.

“The tech lobbyists were out in force, and they poured a lot of energy into not letting anyone get a foothold in meaningful regulation of Big Tech,” said Teri Olle, director of the pro-regulation organization Economic Security California. “I think the industry pulled out all the stops and really focused on making sure there wasn’t a fleet of bills that really held Big Tech accountable.”

Earlier in the year, lawmakers broadly moved bills off the Assembly floor to fine social media companies that negligently cause harm up to $1 million per child and require companies to vet for bias in decision-making tools that can be used in areas like hiring, healthcare and sentencing.

Neither made it to final votes. Lawmakers abandoned their bills after they were substantially amended in the Senate Appropriations Committee amid vociferous industry pushback. Two legislators pulled the plug in the final hour of voting as a lobbying frenzy reached its climax and a midnight deadline on Saturday bore down. Another bill to eradicate campaign “deepfakes” impersonating candidates was weakened to put the onus of flagging them on users, not platforms.

“The industry clearly has significant clout. There’s no doubt about that,” said Wiener, who authored the AI safety bill and is expected to run for Rep. Nancy Pelosi’s seat when she retires. “It’s still really, really hard, even in the California Legislature, and some of my colleagues really experienced that this year with bills getting tripped up with amendments.”

The tech industry found allies in powerful groups like the California Chamber of Commerce, which warned about imposing costly and untenable burdens on companies.

“Our goal is to ensure that there is a level playing field for the deployment of AI technology, while allowing for this industry to continue to thrive and California to remain the technology and innovation capital of the world,” CalChamber Chief of Staff for Policy Ben Golombek said in a statement.

Prominent Silicon Valley firms also played a key role. Amazon lobbied heavily against the anti-bias bill down to the final stretch. Supporters of the social media bill pinned its collapse on a ferocious counteroffensive from Meta.

And two bills to have social media companies compensate news platforms whose content they profit from were shelved after Google struck a deal to fund both newsrooms and AI experimentation — a pact that erstwhile supporters of the bills lambasted as a giveaway to Google .

“There did seem to be some willpower among some substantial part of the Legislature to take on Big Tech,” said Media Guild of the West President Matt Pearce, who backed the initial bills, but the legislation still succumbed to “the power Google is able to wield with the governor and apparently the Legislature.”

Assemblymember Buffy Wicks argued in an interview that she secured the best possible deal from Google, saying the tech company “begrudgingly” accepted the agreement. “I certainly don’t think Google wanted to be where they are today on this,” she said.

But another Democrat argued Meta exerted surgical influence to eviscerate his bill. Assemblymember Josh Lowenthal had built a coalition for his social media bill that included both Democrats and unlikely conservative allies like the chair of the Orange County Republican Party. But he walked away after the Democratic leader of the Senate Appropriations Committee, Sen. Anna Caballero, amended the bill to raise its legal standard.

“The only way this bill could have been murdered is in darkness,” Lowenthal said in an interview. “Tech is now relying on close relationships with leadership.”

Representatives for Google and Meta declined to comment, as did Caballero’s office. Amazon said in a statement that the company was “embedding safety, fairness, security, and privacy across our AI tools and services.”

A lobbyist for the industry group TechNet, Dylan Hoffman, pushed back on the notion that the industry broadly got its way by noting the Legislature approved multiple bills it opposed.

“To the extent that bills were shelved and amended, it really came down to whether lawmakers agreed with our arguments,” Hoffman said. “Sometimes they did, sometimes they didn't.”

Hoffman also argued time management played a key role in some bills not getting votes, predicting some would have passed “if not for the rush at the end.” Wicks faulted the Senate for shelving her bill requiring better identification of AI-generated content at the last moment as time evaporated.

Newsom’s big decision

Now the industry is turning its attention to Newsom and his veto pen — and nowhere will they bring more pressure to bear than on Wiener’s bill requiring large AI models to be tested for the potential to unleash catastrophic harms like bioweapon attacks. The bill galvanized the tech industry as foes warned it would stymie innovation.

It sparked a lobbying blitz from legacy players with a longstanding Sacramento footprint, like Google and TechNet, as well as OpenAI, a leader in the field whose founder Sam Altman has embraced regulation before Congress. Venture capital firms like a16z and Y Combinator enlisted lobbying outfits with ties to Newsom and other Democratic power players. Influential investor and San Francisco kingmaker Ron Conway rallied his network against it.

And in an unusual breach between Democrats, members of California’s House delegation like former Speaker Pelosi and Rep. Zoe Lofgren , who represent parts of Silicon Valley, publicly opposed the bill.

Lofgren reached out to Assembly Speaker Robert Rivas, whose district overlaps hers, and personally contacted Assembly members ahead of a critical floor vote, urging them to reject the bill, according to lawmakers with knowledge of the dynamics.

“It didn't rise on my radar until it actually passed [the Senate], because I didn't think it was going to,” Lofgren said in an interview, adding she opposed it on the recommendation of staff members who heard from industry players and academics.

But the bill passed the Assembly floor. Wiener and his allies said they benefited from qualified support from Anthropic, a competitor of OpenAI that worked with Wiener’s office on amendments, and Elon Musk, who co-founded OpenAI but ultimately left the company.

“There was opposition from the most powerful voices in San Francisco, the a16zs and Y Combinators — it felt like in terms of those heavy hitters, we didn’t have that,” said Nathan Calvin, senior policy counsel for the bill’s architect, the nonprofit research group Center for AI Safety, “but that started to change a bit.”

Now Newsom faces a decision on a bill that has divided one of California’s core industries. A person familiar with the negotiations said the intense lobbying around the bill reflected a genuine split among Silicon Valley players . Newsom declined to comment on his stance.

“This is about more than just the content of the bill. It's about the fears and optimism about the future of this technology,” said the person, who was granted anonymity to discuss private deliberations. “‘This bill will kill open-source development in California’ is a strongly held position. ‘You are going to facilitate catastrophic harms if you don’t regulate this technology’ is another.”

Wiener and his allies argue Newsom has an opportunity to set a responsible national standard. The bill’s detractors are appealing to the governor’s often-restated belief that Silicon Valley is the state’s economic engine and taking heart in his warnings against overregulation.

“He has had strong ties in the tech community going way back, and I have no doubt he’s listening and hearing our concerns,” said Jim Wunderman, who leads a business coalition called the Bay Area Council. “This is one of the most important bills that’s happening not just in California but in the country and the way he handles it and talks about it says a lot about where he stands on one of the key issues of our time.”