A group of academic experts tasked with studying the “frontier” safe and ethical policy of artificial intelligence released their final report almost a year after being convened by Gov. Gavin Newsom.
For the industry, California Report on Frontier AI Policy It gives us a glimpse into where state leaders and lawmakers can quickly put more regulatory energy on the assumption that they are not hindered by the federal government.
The release of the report comes as Congressmen are considering passing President Donald Trump's spending package (called “big beautiful bills” by the president and his supporters).
“A well-written policy can simultaneously meet this obligation to consumers, allowing the state to carefully adjust its policies to meet the specific needs of its members and maintain an important pathway for federal action that provides comparable protection to consumers,” the California report wrote. “In pursuing a balance between innovation and safety, California has the unique opportunity to productively shape AI policy conversations and provide a blueprint across boundaries for balanced policies.”
This report outlined key principles that can be applied to the regulatory space, including the need to balance risk and reward. The need for comprehensive and flexible evidence-based policy making and frameworks. The need for greater transparency and protection of whistleblowers. Creating post-deployment impact reporting channels. and establishing thresholds for policy intervention.
Researchers have also defined the various risks posed by “malicious risks,” or AI technology poses from misuse of actors such as fraud, unconsensual pornographic images, and cyber attacks. It is brought about by the “risk of malfunction” or the unintended consequences of legitimate use cases. It is brought about by a widespread development such as “systemic risks” or labor market disruption, privacy risks, and copyright infringement.
“However, without proper protective measures, strong AI can induce serious inducements and, in some cases, potentially irreversible harm. Experts disagree with the probability of these risks,” the report states. “Nevertheless, California needs to develop a governance approach that acknowledges the importance of early design choices to address evolving technical challenges.”
California has been at the forefront of AI regulation and implementation in recent years. In September 2023, the governor signed Executive Order N-12-23, instructing agents to explore the risks and benefits of generated AI. The state was also the first to launch a series of use case pilots in several divisions in May 2024. In late April 2025, the governor announced the expansion of these projects.
Deep Dive Resources
California Report on Frontier AI Policy
Executive Order n-12-23
Newsom announces continuing AI government efficiency initiatives
State name to genai proof vendor for concept project
Newsom directs agents to investigate profits and risks of generative AI
