Inside California’s Upcoming Year in AI
2026 promises to be an action-packed year in California as both officials and companies gear up for critical issues surrounding kids’ safety, new regulations, and the upcoming midterm elections.
Why It Matters
California has long served as the nation’s testbed for both innovation and regulation. With a growing focus on artificial intelligence (AI), all eyes will be on the state this year.
What We’re Watching
This year, chatbots are set to take center stage.
Assemblymember Rebecca Bauer-Kahan’s Leading Ethical AI Development for Kids Act failed to pass last year, but she plans to introduce a new bill within the next month aimed at protecting children from AI chatbots.
State Senator Steve Padilla is advocating for a moratorium on toys equipped with AI chatbot capabilities through SB 867, which would prohibit such toys for children under 12 for four years. Additionally, efforts are underway to place a Common Sense-OpenAI ballot initiative on the ballot to further protect kids from AI and chatbots.
Bauer-Kahan has expressed concerns about the enforcement measures included in the ballot initiative, stating, “The enforcement that’s in the ballot initiative is not the enforcement that I would like to see.”
Legislative Developments
California’s Transparency in Frontier AI Act, known as SB 53, took effect on January 1. This legislation mandates that frontier AI companies publish safety reports and adhere to new transparency, reporting, and whistleblower regulations.
The bill has been the subject of significant debate in Congress and at the White House, particularly concerning how to preempt state-level AI regulation. Bauer-Kahan has dismissed the White House’s threats to sue states over AI regulation, stating that Congress poses “a much bigger threat.”
Focus Areas for 2026
As elections approach, concerns regarding affordability, data centers, and AI job displacement are coming to a head. Bauer-Kahan aims to investigate how AI will impact California’s workforce, emphasizing the need for transparency to understand the economic implications of the AI age.
She suggested that one effective route involves transparency regarding how AI models are currently being utilized in workplaces.
This week, Bauer-Kahan also introduced legislation targeting data centers, aiming to assess and track energy usage for better grid planning, asserting that companies should bear the costs, not consumers. She believes this approach is more beneficial than implementing a full moratorium, which could negatively affect the state’s economy.
The Bottom Line
Despite the Trump administration’s threats to state-level AI policy, California is forging ahead with its legislative initiatives to regulate emerging technologies.
