California’s New AI Regulations: What Businesses Must Know

California’s AI Laws: A Comprehensive Overview

On January 1, 2025, a significant set of new laws governing artificial intelligence (AI) went into effect in California, marking a pivotal moment in the regulation of AI technologies. These laws are designed to protect consumer rights, ensure transparency, and address the ethical implications of AI across various sectors.

Key Takeaways from California’s New AI Legislation

California’s new legislation includes:

  • Eight laws focused on protecting performers’ rights and addressing the misuse of deepfake technology.
  • Three laws that clarify the treatment of AI-generated data as personal information.
  • Three laws regulating AI’s role in healthcare, particularly concerning patient communication and medical decision-making.

These measures represent California’s ambition to lead the nation in AI regulation, reinforcing the state’s commitment to safeguarding its citizens against potential AI abuses.

Legislation Overview

General AI Laws

The general AI laws enacted in this session include:

  • AB 2885: Establishes a standard definition of AI, characterizing it as an engineered or machine-based system capable of inferring outputs from its inputs.
  • AB 2013: Requires developers to document and disclose the datasets used to train generative AI systems, enhancing transparency in AI development.

Social Media, Politics, and Entertainment

Eight new laws in this category aim to protect individuals from the misuse of AI in media and politics:

  • AB 1831: Expands child pornography laws to include AI-generated content.
  • SB 926: Criminalizes non-consensual deepfake pornography, allowing victims to seek damages.
  • SB 981: Mandates social media platforms to create reporting tools for digitally altered identity theft.

Health Care Services

Three laws address the integration of AI within healthcare:

  • AB 3030: Requires health care providers using AI for patient communications to include disclaimers about the involvement of AI.
  • SB 1120: Ensures that only licensed physicians can make final decisions on medical necessity, restricting AI’s role in these determinations.

Data Privacy

California’s laws also emphasize data privacy, with three significant regulations:

  • AB 1008: Clarifies that AI-generated data is treated as personal information under the California Consumer Privacy Act (CCPA).
  • SB 942: Requires companies to provide tools for users to identify AI-generated content.

Government and Education

The legislation affecting government use of AI includes:

  • SB 896: Regulates state agencies’ use of generative AI, ensuring transparency and accountability.
  • AB 2876: Incorporates AI literacy into California’s K-12 curriculum, preparing future generations for an AI-driven world.

Compliance and Enforcement

The enforcement of these laws will primarily come from state agencies, with potential penalties for violations including fines and criminal charges. While some laws allow for a private right of action, many focus on state oversight to protect consumers.

Conclusion

California’s new AI laws represent a comprehensive effort to regulate this rapidly evolving technology across various industries. By addressing ethical concerns, protecting consumer rights, and ensuring transparency, these laws set a benchmark for other states. As compliance timelines approach, businesses operating within California will need to adapt quickly to meet the new requirements, indicating that the landscape of AI regulation is only beginning to evolve.

More Insights

US Rejects UN’s Call for Global AI Governance Framework

U.S. officials rejected the establishment of a global AI governance framework at the United Nations General Assembly, despite broad support from many nations, including China. Michael Kratsios of the...

Agentic AI: Managing the Risks of Autonomous Systems

As companies increasingly adopt agentic AI systems for autonomous decision-making, they face the emerging challenge of agentic AI sprawl, which can lead to security vulnerabilities and operational...

AI as a New Opinion Gatekeeper: Addressing Hidden Biases

As large language models (LLMs) become increasingly integrated into sectors like healthcare and finance, a new study highlights the potential for subtle biases in AI systems to distort public...

AI Accountability: A New Era of Regulation and Compliance

The burgeoning world of Artificial Intelligence (AI) is at a critical juncture as regulatory actions signal a new era of accountability and ethical deployment. Recent events highlight the shift...

Choosing Effective AI Governance Tools for Safer Adoption

As generative AI continues to evolve, so do the associated risks, making AI governance tools essential for managing these challenges. This initiative, in collaboration with Tokio Marine Group, aims to...

UN Initiatives for Trustworthy AI Governance

The United Nations is working to influence global policy on artificial intelligence by establishing an expert panel to develop standards for "safe, secure and trustworthy" AI. This initiative aims to...

Data-Driven Governance: Shaping AI Regulation in Singapore

The conversation between Thomas Roehm from SAS and Frankie Phua from United Overseas Bank at the SAS Innovate On Tour in Singapore explores how data-driven regulation can effectively govern rapidly...

Preparing SMEs for EU AI Compliance Challenges

Small and medium-sized enterprises (SMEs) must navigate the complexities of the EU AI Act, which categorizes many AI applications as "high-risk" and imposes strict compliance requirements. To adapt...

Draft Guidance on Reporting Serious Incidents Under the EU AI Act

On September 26, 2025, the European Commission published draft guidance on serious incident reporting requirements for high-risk AI systems under the EU AI Act. Organizations developing or deploying...