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In a surprising move, California Governor Gavin Newsom vetoed SB 1047 on Sunday, a bill poised to implement the country's most comprehensive regulations on the burgeoning artificial intelligence industry. The proposal, overwhelmingly passed by state legislators, sought to make tech companies liable for damages caused by AI models and required a "kill switch" for emergencies.

Governor Newsom described the bill as "well-intentioned" but argued that its stringent requirements would disproportionately burden the state's leading AI businesses. He expressed concerns that the legislation focused overly on the largest and most powerful AI models, neglecting the potential risks posed by smaller, specialized ones.

"The smaller, specialized models may emerge as equally or even more dangerous than those targeted by SB 1047, potentially stifling innovation that benefits the public good," Newsom explained in his veto statement.

Co-author of the bill, California Senator Scott Wiener, criticized Newsom's veto, calling it a setback for AI accountability. Wiener argued that without such regulatory measures, there would be no binding restrictions on companies developing powerful AI technologies. "This veto leaves us with the troubling reality that companies aiming to create extremely powerful technology face no binding restrictions from U.S. policymakers," Wiener wrote on X.

The vetoed bill would have mandated safety tests for massively powerful AI models, a move Wiener believes is crucial for public safety. He voiced concerns over the industry's ability to self-regulate effectively, stating: "Voluntary commitments from the industry are not enforceable and rarely work out well for the public."

Lobbying against the bill were influential Silicon Valley entities, including Andreessen Horowitz, OpenAI, and trade groups representing Google and Meta. They argued that such regulations would hinder AI development and drive away talent from California. OpenAI's Chief Strategy Officer, Jason Kwon, warned in a letter that SB 1047 could impede growth and innovation, causing California's engineers and entrepreneurs to seek opportunities elsewhere.

In contrast, notable figures such as Elon Musk and pioneering AI scientists Geoffrey Hinton and Yoshua Bengio supported the bill. In a letter urging Newsom to sign it, they highlighted the potential severe risks posed by powerful AI models, such as increased access to biological weapons and cyberattacks on critical infrastructure.

Reacting to the veto, Senator Wiener labeled it a "setback" for those advocating for oversight of massive corporations influencing public safety and welfare. Other states, like Colorado and Utah, have introduced more narrowly focused laws addressing AI-related consumer protection concerns, including bias in employment and healthcare decisions.

While Governor Newsom recently signed other AI-related bills into law, including measures against deepfakes during elections and unauthorized AI replication of actors' likenesses, federal legislation on AI oversight remains nonexistent. As investments in AI continue to surge, the absence of federal regulatory measures leaves a significant gap in managing its rapid advancement and potential risks.