AI Regulation in California Takes Another Step Forward as Sector Funding Continues

YEREVAN (CoinChapter.com) – In California, State Senator Steve Padilla has introduced two significant bills related to the ethical use and regulation of artificial intelligence (AI). These bills, Senate Bill 892 and Bill 893 aim to create a safer and more ethical framework for AI services within the state.

What are AI Regulation Bills All About?

Key aspects of these bills include the following:

Senate Bill 892: This bill focuses on setting standards for safety, privacy, and non-discrimination for AI services. The California Department of Technology is tasked with establishing these standards.

Importantly, beginning Aug 1, 2025, California would not enter into any contract for AI services unless the providers meet these standards. This bill is a step towards ensuring that AI services used by the state adhere to ethical practices.

Senate Bill 893: The second bill aims at creating an AI Research Hub in California within an AI regulation frame. This hub is intended to be a central point for AI research, development, deployment, and application for the public good.

It mandates collaboration between various government entities like the Government Operations Agency, the Governor’s Office of Business and Economic Development, and the Department of Technology.

The idea is to synergize efforts across academic and governmental lines to promote responsible AI regulations and development. These legislative efforts by Senator Padilla align with a broader trend of increasing focus on the ethical implications of AI technology.

They follow other initiatives, such as a recent call by California Governor Gavin Newsom for statewide generative AI training, and a bill introduced by assembly member Ash Kalra aimed at protecting artists and entertainers in the context of digital AI replications.

These developments are part of a larger conversation about AI’s impact on society and the economy, especially in tech-centric regions like California. The bills could set significant precedents for how the government uses and regulates AI, not only in California but potentially influencing policies in other states and at the federal level​.

AI Funding Flourished in California

Meanwhile, AI funding continued within California, and in the broader US.

The overall trend in AI startup funding grew throughout the year. In 2023, there was a significant increase in investment in AI-related companies across the United States. More than one in four dollars invested in American startups that year went to AI-related firms. This was more than double the proportion seen in the previous year.

Despite a general downturn in startup investment in 2023, with overall funding decreasing by 38% compared to 2022, AI was a standout sector. As AI regulation continued, global funding for AI startups reached close to $50 billion in 2023, which represented a 9% increase from 2022.

This growth indicates a strong interest and confidence in the AI sector, particularly in foundational model companies. Given that California is a major hub for technology and innovation, particularly in areas like Silicon Valley, it’s likely that a significant portion of this AI funding went to startups based in California.

These trends suggest that while the broader startup funding environment was challenging in 2023, AI regulation and startups, potentially including those in California, were still able to attract significant investment.