California tightens AI vendor oversight through executive order
California Gov. Gavin Newsom on Monday issued an executive order aimed at tightening oversight of artificial intelligence companies contracting with the state, an attempt at countering the Trump administration’s more hands-off approach to AI regulation.
The order directs state agencies to overhaul procurement standards and requires companies seeking state government contracts to demonstrate how their AI systems mitigate risks such as bias, civil rights violations and the spread of illegal or exploitative content.
The order arrives amid escalating tension between states and Washington over AI regulation. Recent federal policy has discouraged state-level rules in favor of a national framework, but California officials argue stronger guardrails are needed as AI systems are increasingly embedded in public services.
“California leads in AI, and we’re going to use every tool we have to ensure companies protect people’s rights, not exploit them or put them in harm’s way,” Newsom said in a statement about the order. “While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way.”
Under the directive, the state’s Government Operations Agency and Department of Technology have 120 days to develop new certification and vetting processes for state vendors. Both will require contractors to clearly document safeguards against misuse, including discrimination and privacy harms, before deploying tools in public services.
Newsom’s executive order also calls for statewide standards on watermarking AI-generated content to help curb misinformation and improve transparency, building on California’s broader push for greater AI governance. The state last year passed legislation requiring large AI developers to disclose safety practices.
In addition to the order, Newsom also announced plans to expand the state’s use of generative AI tools to improve public services, including systems designed to help residents navigate benefits and programs based on life events, like starting a business or finding a job.
