California’s AI Procurement Overhaul

Vetting AI for Government: California’s Executive Order Sets New Expectations

California Governor Gavin Newsom has issued a new executive order aimed at tightening the state’s procurement rules for artificial intelligence (AI) vendors. This initiative seeks to “raise the bar” for companies wishing to sell AI tools to the state, ensuring that contractors meet robust standards and can demonstrate responsible policies that prevent misuse, while also protecting users’ safety and privacy.

The executive order contrasts California’s approach with recent federal contracting missteps, emphasizing that AI adopted by the state should not enable bad actors to exploit data, undermine security, or violate civil rights.

Key Directives of the Executive Order

The order directs the Government Operations Agency to develop a plan for updated contracting processes and best practices. This plan will vet companies based on how they attest to and explain safeguards addressing key risks, including:

  • Exploitation or distribution of illegal content
  • Biased model behavior or lack of bias prevention technology
  • Violations of civil rights and free speech in AI tools

Additionally, the order allows the state to separate its procurement authorization process for AI tools from the federal government when necessary.

Watermarking and Public Services

The governor also directs the California Department of Technology to develop recommendations and best practices for watermarking AI-generated images or manipulated video, ensuring compliance with state law.

This executive order is not solely focused on restrictions. It also commits California to expanding the use of generative AI to improve public services. This includes a new AI-directed tool designed to assist Californians in navigating programs and benefits related to significant life events, such as starting a business or finding a job.

Engagement and Workforce Impact

Alongside this service-delivery push, California plans a statewide engagement effort through the Engaged California program to gather public input on how AI may impact the workforce. This signifies that California is seeking both stronger guardrails and a clearer public mandate as AI adoption accelerates.

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