California Governor Gavin Newsom has long benefited from Silicon Valley’s AI boom in the form of state tax revenue and political contributions from industry leaders.
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Mr. Newsom’s interests often aligned with those of the tech giants, and he primarily protected those interests. In 2024, for example, he vetoed a bill that would have made artificial intelligence companies legally liable in the event of terrorism, mass casualties, or other catastrophes that harm society. Companies would also have needed to maintain a kill switch to be able to turn off the AI process.
Newsom has long talked about the need to find a pragmatic balance between utopian corporate visions of AI turnaround and dystopian populist nightmares of human subjugation to machines.
“We must get this right, given the stakes in protecting this technology’s promise to advance the public interest from real threats without unnecessarily impeding it,” he said in his veto message.
But as he prepares for a widely anticipated 2028 presidential election, Newsom is shifting his focus from the business side to the populist side. The move could have implications not only for the Democratic nomination but also for the general election, as the left and right of the political spectrum unite around concerns that AI will drive up costs for consumers and pose a threat to freedom, cybersecurity, and physical safety.
The issue is troubling elected officials of both parties at the federal and state levels.
They clearly feel the public’s enthusiasm for a variety of AI-related issues, from the potential for job losses, the expensive energy demands of data centers, and sexual exploitation to the more abstract fear that the lives of Americans are being run by a few wealthy and powerful people through the use of advanced machines.
Meanwhile, tech giants are bringing in money and spending lavishly on campaigns, and national security experts warn that unilateral disarmament in the AI arms race spells disaster.
Last week, President Donald Trump canceled his planned executive order on AI regulation at the last minute, expressing concern that it could “impede” the country’s ability to compete with China.
At the same time, Newsom has begun using his authority as California’s chief executive to roll out efforts to strengthen AI controls.
Jason Elliott, a policy-minded political consultant who served as Newsom’s deputy chief of staff, said the governor has been deeply involved in AI policy, whether it’s the Frontier Security Act he supported last year (requiring major AI developers to identify and mitigate risks before deploying their products) or the bill he vetoed the year before.
“Just because you can name a problem and take it seriously doesn’t mean every solution someone suggests is a good one,” Elliott says. “I’ve never seen an issue move as quickly as AI, and nothing even comes close. So, of course, every elected official’s position should be evolving week by week, month by month on AI, because the underlying technology itself seems to be changing every day.”
Newsom is evolving in real time, to the delight of some progressives who believed he was dragging his feet on behalf of corporations and donors.
Last week, Newsom signed an executive order requiring state agencies to work with industry groups, academics, and labor organizations to assess the impact of AI on California workers and develop plans to offset it.
“We need to rethink the whole system, and we’re not. I don’t think we’re having an accelerated or sophisticated conversation right now. We’re still debating who’s going to pay for the increased electricity bills because of data centers, which is a legitimate question,” Newsom said at a May 19 conference in Washington by the liberal think tank Center for American Progress. “But it’s not of And…the technology genie has no intention of going back to the bottle. ”
Newsom also introduced a revised state budget this month that would significantly increase antitrust enforcement funding, which has been used to go after companies that use algorithms to set prices.
Earlier this month, he appointed Rohit Chopra, the former head of the Consumer Financial Protection Bureau, who had warned about the potential for AI overreach, to head the state Enterprise and Consumer Services Authority. And, like other 2028 candidates, Newsom favors Massachusetts Sen. Elizabeth Warren, one of the most vocal critics of the economic impact of AI, according to Axios.
Among the many people looking forward to 2028, there is a wide range of opinions about AI and its various uses, as well as uncertainty about how and when to regulate them. Data centers are just one part of AI policy, but they have become a flashpoint for voters and a hot area for policymakers with White House ambitions.
Pennsylvania Governor Josh Shapiro, for example, is trying to tie accelerated data center permitting to companies’ willingness to pay their power bills, protect their workforce and protect the environment. Rep. Alexandria Ocasio-Cortez (D.Y.) called for a moratorium on data centers and pressed federal officials about the impact on drinking water.
Like Newsom, Illinois Gov. JB Pritzker, who is also widely believed to be considering a 2028 bid, is moving toward a more cautious approach to AI. In February, he proposed suspending tax incentives for data center construction for two years.
A YouGov/Economist poll this month found that 71% of Americans (77% of Democrats and 68% of Republicans) say AI is being developed “too fast.”
“I think it’s clear to anyone who’s been paying attention to the polls and the tone that there’s a lot of concern at the voter level about AI and cost and who the economy is serving and not serving,” said Dan Geldon, Warren’s former chief of staff. “It makes sense for Mr. Newsom and other candidates to open channels with populists and consider their ideas in this environment.”
But the profits from “hyperscalers” — technology companies that build data centers that process large amounts of information — are attractive to many state executives in both parties.
“Hyperscalers are going to end up paying literally hundreds of millions of dollars a year to local governments, cities, counties and school districts in fees and recurring payments,” Mississippi Republican Gov. Tate Reeves, who has welcomed data center investments in his state from big companies like Amazon and xAI, said in a recent interview.
But some Republican governors are more skeptical about AI and data centers.
Florida Governor Ron DeSantis (R) unsuccessfully pushed for an AI “bill of rights” that would protect data privacy and prevent insurance companies from basing claims on machine-driven decisions. Like Mr. Reeves, he signed legislation requiring hyperscalers to pay utility costs associated with their operations.
For 2028 candidates of both parties, the opportunities and risks of developing AI policy at the speed of machine learning are becoming clearer. For Newsom, there is a clear shift toward the populist leanings of the progressive wing of the party.
Elliott, a former aide, said it makes sense at a public policy level for the governor to keep abreast of changes in technology and adjust his response accordingly.
“It’s true that Governor Newsom has continued to monitor the state of the industry, the state of technology, and update his views as the industry advances,” Elliott said. “Republicans are doing the same thing, they should be doing the same thing, and there are many Republicans across the country who are taking a very pragmatic approach to regulating artificial intelligence.”
