SAN FRANCISCO:-  Governor Gavin Newsom issued an executive order today to strengthen California’s procurement processes and raise the bar for artificial intelligence companies seeking to do business with the state. The order aims to ensure that companies meet strong standards and demonstrate responsible policies that prevent misuse of their technology, while protecting users’ safety and privacy.  Unlike the Trump administration, California remains committed to ensuring that AI solutions adopted and deployed by the largest state in the nation and 4th largest economy in the world cannot be misused by bad actors seeking to exploit their users’ data, subvert their security, and violate their civil rights.

Governor Gavin Newsom said, “California’s always been the birthplace of innovation. But we also understand the flip side: in the wrong hands innovation can be misused in ways that put people at risk. 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. While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way.”

The order also commits to expanding California’s use of GenAI to help deliver improved state services, including a new AI-directed tool to help Californians navigate available programs and benefits by life event, such as starting a business or finding a job. The executive order can be viewed here.

California is the fourth-largest economy in the world, the birthplace of tech, and the top pipeline for tech talent, and has demonstrated its ability to responsibly advance innovation and safeguards — helping everyone from the nation’s largest valued tech companies to pre-seed startups to thrive.

California’s tech leadership

The announcement follows the Trump administration’s recent contracting missteps and attempts to require companies to violate their users’ privacy and civil rights and to deploy technologies that would put individuals’ safety at risk. Meanwhile, California is taking a different approach. Governor Newsom’s order will direct the Government Operations Agency to develop a plan for new state contracting processes and best practices that vet companies based in part on how they attest and explain their policies and safeguards to protect the public from the following with regard to their technology:

Exploitation or distribution of illegal content

Models that display bias or lack technology to prevent such bias

Violations of civil rights and free speech

The order will also enable the state to separate its procurement authorization process from the federal government’s if needed and direct the state to leverage AI to improve government service delivery, increase transparency, and strengthen accountability.

The Governor also directs the California Department of Technology to create recommendations and best practices for watermarking AI-generated images or manipulated video consistent with state law — the first of its kind nationwide.

AI’s impact on our workforce

With opportunities created by AI come questions about job security and the potential for the technology to have a disruptive impact on the California workforce.  Californians deserve the opportunity to weigh in on how state policy responds to this emerging technology and shapes the future economy. Last year, Governor Newsom announced a first-in-the-nation digital democracy platform, Engaged California, a new tool to help the state build communication and engagement with Californians. The tool was first launched as a pilot to allow Angelenos to better shape recovery after the LA firestorms. The tool was then used to provide state employees with the opportunity to inform efficiency efforts in state government.Governor Newsom is announcing today that the state is launching the first statewide engagement effort with all Californians through Engaged California, providing a stronger tool to help guide the state’s response to AI and its impact on the workforce. This new first-in-the-nation digital democracy effort will roll out in the upcoming months.

This effort is in contrast to the Trump administration and congressional Republicans, who have proven themselves incapable of passing even the most basic protections when it comes to AI. This also adds to Governor Newsom’s work putting California more out front on advancing AI than any other state:

Directing the state to responsibly integrate generative AI into state operations, including directing the development of innovative new procurement mechanisms, AI sandboxes to pilot the technology, new cybersecurity assessments, and new guidelines to ensure safe and ethical use.

Advancing cutting-edge policy by commissioning a report from world-leading AI academics and experts to help advance responsible AI governance.

Leading with efficiency, issuing an executive order to solicit input from state employees and partnering with executive and tech leaders to expand the use of efficiency tools, including AI, within state government.

Making Californians’ lives better through GenAI, reducing highway congestion, improving roadway safety, and improving wildfire detection, among other new initiatives.

Leveraging industry partnerships with Nvidia, Google, Adobe, IBM, and Microsoft to help prepare the current and future generation to lead an AI-ready workforce, including expanding access to AI trainings for over two million students and faculty in public high schools and universities across California, including community colleges and California State Universities.

California’s innovation economy dominates

California is home to 33 of the top 50 privately held AI companies around the globe and leads with 25% of all AI patents, conference papers, and companies.

The Bay Area captured a majority of U.S. AI startup funding in the past year. From Q3 2024 to Q2 2025, the Bay Area attracted 51% of ALL U.S. AI startup funding on Carta’s platform — far ahead of the entire state of New York (11%) and Boston (5.5%).

California leads U.S. demand for AI talent. In 2024, 15.7% of all U.S. AI job postings were in California — #1 by state, well ahead of Texas (8.8%) and New York (5.8%), per the 2025 Stanford AI Index.

In 2024, more than half of global VC funding for AI and machine learning startups went to companies in the Bay Area.

California is home to three of the four companies that have passed the $3 trillion valuation mark. Each of these California-based companies — Google, Apple, and Nvidia — are tech companies involved in AI and have created hundreds of thousands of jobs.

Birthplace of modern tech

California works closely to foster tech leadership and create an environment where industry and talent thrive. This is why California is home to the most tech companies in the nation. California is the global leader in technology and is balancing its work to advance AI with commonsense laws to protect the public, while also embracing the technology to make our lives easier and make government more efficient, effective, and transparent.California currently has laws that help:

Foster and guide the development of frontier AI models

Safeguard against the risks of catastrophic harms 

Create strong protocols for child safety and protections against self-harm

Crack down on sexually explicit deepfakes and require AI watermarking

Protect performers’ digital likenesses

Prevent scams from AI-generated robocalls