California Senate advances AI regulation bills despite federal pushback
The bills, both authored by Sen. Steve Padilla (D-San Diego), take direct aim at the mental health risks of AI tools and the lack of transparency in automated decision-making systems. But they may soon run up against a proposed federal moratorium that would block states from enacting AI regulations for the next decade, as reported by the Associated Press.
First, there's SB 243. It targets the growing use of AI chatbots marketed as companions for mental health support and emotional wellbeing. The bill would ban the use of addictive engagement tactics and require developers to notify users regularly that the chatbot is not human.
'Tech companies are creating these AI products in a regulatory vacuum,' Padilla stated on the issue. 'But, they have proven they cannot be trusted to minimize the risks they pose to the public on their own. The stakes are too high to allow vulnerable users to continue to access this technology without proper guardrails in place to ensure transparency, safety, and accountability.'
California senator slams ICE raid at San Diego restaurants: 'weaponized hate'
Meanwhile, SB 420 takes a broader approach, seeking to establish a comprehensive regulatory framework around AI use in both public and private decision-making systems. The legislation would mandate that individuals be informed when AI tools are used to make decisions about them, explain how the systems function, and provide a process for human appeal in some cases. It also calls for impact assessments to measure potential data misuse or algorithmic bias.
The two bills now move to the State Assembly and, if approved, could be on Governor Gavin Newsom's desk later this year.
The legislative momentum in Sacramento stands in sharp contrast to efforts in Washington, D.C., where a House Republican-backed reconciliation bill would impose a 10-year freeze on state or local AI regulations. Critics argue the federal proposal could stall crucial oversight during a pivotal time for AI development.
Padilla has strongly opposed the federal moratorium, stating, 'California has a proud heritage as a home for technological vision while enforcing ethical, safe standards in concert with those values, not in opposition. However, federal mismanagement has left the public vulnerable to the dangers AI poses. California must step in to provide guiderails that create common sense consumer protections while still fostering innovation.'
The state's push for AI accountability comes on the heels of a March report from a working group appointed by Gov. Newsom, offering policy guidance on responsible AI governance.
This week, 260 lawmakers from all 50 states — Democrats and Republicans alike — signed a joint letter to Congress urging them to reject the proposed moratorium, highlighting a growing bipartisan consensus around the need for state-level action.
As AI tools become more integrated into daily life, California appears determined to lead the charge — even if it means challenging federal authority.
The Associated Press contributed to this report.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
16 minutes ago
- Yahoo
Samsung Chip Profit Tumbles While Investors Seek Bottom
(Bloomberg) -- Samsung Electronics Co.'s chip unit plunged a far bigger-than-expected 94% in the June quarter, reflecting the depth of a slump that's plaguing the world's largest memory chipmaker. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus We Should All Be Biking Along the Beach The weak results at the pivotal business underline how far Samsung has fallen in the lucrative artificial intelligence arena, where SK Hynix Inc. leads in high-end memory and Taiwan Semiconductor Manufacturing Co. dominates in contract chipmaking. The chip arm reported three-month operating profit of 400 billion won ($288 million), the lowest in six quarters, versus analysts' average projection for 2.73 trillion won. The decline stemmed largely from a one-time inventory cost as US export controls led to unsold AI chips at its foundry business, which relies in part on Chinese demand. The profit decline was despite solid demand for high-end memory products for servers, the company said. Shares of South Korea's largest company fell as much as 1.8% Thursday morning in Seoul. The grim results reflect Samsung's poor performance on high-bandwidth memory, said MS Hwang, research director at Counterpoint. Samsung's share in the global HBM market slipped to 17% in the second quarter in terms of bit volume, down from more than 40% in the first quarter of 2024, he said. 'This suggests that Samsung has fallen behind even Micron Technology Inc. to rank No. 3,' in the second quarter, he said. Samsung will 'actively respond' to demand for higher-density memory, the company said. Operating losses at Samsung's foundry unit are expected to narrow in the second half of the year on a gradual recovery in demand, the company said. Samsung's underwhelming quarterly report comes after the company won a $16.5 billion contract from Tesla Inc. to produce AI chips at an upcoming plant in Taylor, Texas. Its stock gained ground after news about the agreement broke earlier this week, bringing Samsung's gains in July to over 20% and putting the stock on track for its best month in years. The company has been stepping up spending on research and development and front-end capacity in its efforts to catch up with SK Hynix and Micron in AI memory chips. Samsung has struggled to get its latest products certified by Nvidia — providing an unusually long window for SK Hynix to carve out commanding leads in the booming AI memory market. At the same time, it's been trying to win large customers away from contract chipmaking powerhouse TSMC to revive its ailing foundry division where operating rates have plunged. TSMC has begun production in Arizona and is ramping up capacity in the US, while Samsung has slowed completion of its Taylor plant, now scheduled to start operating in 2026. A successful implementation of the multi-year deal with Tesla would improve Samsung's prospects for winning more clients and validate its technology for 2-nanometer mass production. Investors are also looking for clues as to whether Samsung will benefit from Nvidia Corp.'s resumption of sales of its H20 AI chips to China. The Korean memory maker's less advanced HBM3 has been used alongside H20 chips in the past. Samsung, which flagged weak preliminary operating profit and revenue numbers earlier in July, said net income came to 4.93 trillion won, missing the analysts' estimate of 6.37 trillion won. Fears about missing first-mover advantages in AI have weighed on Samsung. That's despite solid double-digit profitability in its mobile segment, which reported solid sales of its Galaxy S25 phones. Samsung hopes to maintain momentum through the recently released Galaxy Z Fold and Z Flip as well as the debut of its first trifold smartphone later this year. --With assistance from Mark Anderson. (Updates with market reaction and analyst commentary.) Russia Builds a New Web Around Kremlin's Handpicked Super App Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16 minutes ago
- Yahoo
OpenAI hits $12 billion in annualized revenue, the Information reports
(Reuters) -ChatGPT-maker OpenAI roughly doubled its revenue in the first seven months of the year, reaching $12 billion in annualized revenue, the Information reported on Wednesday. Reuters could not immediately confirm the report. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16 minutes ago
- Yahoo
Samsung profit tumbles as it struggles to catch up in the AI chip race
Just a few years ago, Samsung Electronics stood as a leading force in the global semiconductor race, dominating one chip sector and eyeing Taiwan's TSMC in the battle for supremacy in another. But recent stumbles – including its failure to capitalize early on the artificial intelligence boom – has left it outmaneuvered, experts say, as the company struggles with deepening market share losses. Samsung's second-quarter operating profit plummeted 55% to 4.7 trillion won ($3.4 billion), down from 10.4 trillion won ($7.5 billion) a year earlier, though its revenue increased slightly compared to the same period last year. Operating profit for its chip division, historically a cash cow that used to account for two-thirds of its total profit, shrank by nearly 94% from April to June compared to a year ago. It blamed the worse-than-expected performance on inventory value adjustments, low utilization rate for its contract chipmaking business and continued fallout from US export controls on advanced AI chips to China – a key market for Samsung. Thursday's disappointing earnings report reignites concerns about the future of the embattled South Korean tech giant. Samsung warned investors of its dismal performance in its earnings projection earlier this month. The results come on the heels of a $16.5 billion deal with Tesla, announced this week, to produce its new chips – a move expected to boost Samsung's outlook. Looking ahead for the second half the year, Samsung said it plans to proactively meet the growing demand for high value-added and AI-driven products and continue to strengthen competitiveness in advanced semiconductors. How Samsung lost its edge South Korea's largest conglomerate has run into significant headwinds in recent years across both of its key revenue streams: the manufacturing of memory chips, which help devices store data, and logic chips, which power data processing and computation. Once the industry's leading memory chipmaker, Samsung has lost ground to rivals like South Korean SK Hynix and American Micron Technology, particularly in the fast-growing market for high bandwidth memory (HBM) sector. HBM, made up of stacks of DRAM memory chips (dynamic random access memory) used for short-term data storage, are essential for AI processors developed by companies like Nvidia and AMD. Meanwhile, Samsung's logic semiconductor business trails industry leader TSMC both in cutting-edge chip technologies and market share. In the first quarter of this year, SK Hynix overtook Samsung to lead the global DRAM market, while TSMC extended its dominance in logic chips with a 68% market share, compared to just 8% for Samsung, according to market research firm TrendForce. Sanjeev Rana, head of Korea research at CLSA, a brokerage firm, said a series of 'missteps' by Samsung – most notably management's failure to anticipate the surge in AI demand – has contributed to its current struggles. 'They were slow to recognize the coming AI revolution, and they bet on some other products, other technologies, which, in hindsight, didn't turn out to be very good bets,' he said, explaining that Samsung overlooked the potential of HBM initially. As a result, Samsung has so far missed out on being a supplier for its most advanced high-bandwidth memory product to Nvidia, which accounts for nearly 80% of global HBM demand last year, according to Rana. The product has repeatedly failed Nvidia's performance tests, though he expects the company to clear them in the next two months. While Samsung announced in June that it managed to secure orders from AMD and Broadcom, rivals SK Hynix and Micron have already begun delivering samples of more advanced memory chips to customers. At the same time, Samsung's logic chip business – once central to its ambition to rival TSMC – is also under mounting pressure. Despite tens of billions of investments over the past few years, the company has been unable to secure meaningful orders for its advanced chips, leading to underutilized facilities, Rana said. Last year, CLSA estimated that Samsung's contract chipmaking business posted an operating loss of 5.6 trillion won ($4.1 billion). That figure is expected to rise to 6.6 trillion won ($4.8 billion) this year. US restrictions on the sale of advanced chips to China have also taken a toll on Samsung's revenue, as shipments to Chinese clients and projects were forced to pause pending regulatory review, said Joanne Chiao, an analyst at TrendForce. But with some chips now having cleared the review process, the second quarter is expected to be the most affected period, she added. A potential turnaround thanks to Tesla Tesla offered Samsung a lifeline this week. Its CEO Elon Musk announced that the electric vehicle company has tapped the Korean chipmaker to make its new chips for self-driving cars and humanoid robots in a $16.5 billion deal. 'Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip,' he said in a post on X. 'Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress.' Samsung's shares surged more than 6.9% to reach their highest level since September following news of the deal. Tesla currently sources its AI4 chips, which power its advanced driver assistance systems called Full Self-Driving (FSD) software, from Samsung, but it enlisted TSMC to produce its AI5 chips, according to Musk. The deal came after Samsung postponed the operational start of its chipmaking plants in Taylor, Texas to 2026 from its original schedule of 2024, as it struggled to win customers for the project. Ray Wang, research director focusing on semiconductor industry at Futurum Group, called the deal with Tesla 'significant,' saying it could boost Samsung's struggling profitability and validate its capabilities in producing advanced chips. The agreement will also help increase utilization of its Texas facilities, improving the company's return on investment, he added. Rana said that although mass production for the Tesla project won't begin until 2027, the deal is a boost to market sentiment and represents 'a big word of confidence.' 'The management has done a lot of restructuring for this business in the last 12-15 months or so, so I think they now understand what the problems were, and they have made some efforts to resolving those issues,' he said. 'Things will get better from the second half (of the year).'
