California Mandates AI Safeguards for State Contractors

California Governor Gavin Newsom signed an executive order on Monday that requires companies holding state contracts to implement safeguards against AI misuse. Specifically, companies must ensure their AI systems do not generate illegal content, amplify harmful biases, or infringe upon civil rights. To combat disinformation, state agencies will also be required to watermark AI-generated images and videos. The order includes a specific provision for handling federal directives: if the U.S. federal government designates a company as a supply chain risk, California will conduct its own review and potentially continue working with that vendor. This action comes as the Pentagon identified Anthropic as a supply chain risk, which prohibits U.S. defense contractors from using Anthropic technologies for U.S. military needs. Within 120 days, California's procurement and technology agencies are expected to develop guidelines for new AI certifications. These certifications will enable companies to demonstrate compliance with responsible AI practices and public safety measures. The executive order reinforces California's drive to regulate AI independently, distinct from the Trump administration, which has repeatedly sought to block state-level AI legislation.