California governor vetoes AI bill: What it means for Google, Microsoft, Meta, OpenAI and other tech giants

California Governor Gavin Newsom has vetoed a bill on artificial intelligence (AI) safety, noting the burden the bill would have placed on AI companies and criticising that the bill may be too broad. Senate Bill 1047 (SB1047), also known as the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, was passed by California's state legislature in August this year..

The Senate Bill 1047 is aimed to make sure that really powerful AI systems are safe, mitigate the risks of “catastrophic harm” like creating dangerous weapons before their public release and hold developers accountable in case severe harm is caused by the models.
The bill essentially targets big tech companies – like Google, Facebook parent Meta, Microsoft-backed OpenAI and others – that are developing powerful AI models. It focuses on AI models that cost a lot of money – over $100 million – to train and require massive computing power.

Newsom said that the bill can “give the public a false sense of security about controlling this fast-moving technology” and that “adaptability is critical as we race to regulate a technology still in its infancy.”
Here is excerpt from his statement:
While well-intentioned, SB 1047 does 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. I do not believe this is the best approach to protecting the public from real threats posed by the technology.
California is home to 32 of the world's 50 leading Al companies, pioneers in one of the most significant technological advances in modern history. We lead in this space because of our research and education institutions, our diverse and motivated workforce, and our free-spirited cultivation of intellectual freedom. As stewards and innovators of the future, I take seriously the responsibility to regulate this industry.
By focusing only on the most expensive and large-scale models, SB 1047 establishes a regulatory framework that could give the public a false sense of security about controlling this fast-moving technology. Smaller, specialized models may emerge as equally or even more dangerous than the models targeted by SB 1047 - at the potential expense of curtailing the very innovation that fuels advancement in favor of the public good.

For major AI companies like Google, Microsoft, OpenAI, Meta and others, the veto of SB 1047 means they can continue developing and deploying large AI models without the stringent safety tests and liability measures that the bill would have imposed. This decision will essentially allow the tech giants to maintain their pace of innovation and avoid potential legal and financial burdens associated with the bill’s requirements.