California Governor Gavin Newsom issued a first-of-its-kind executive order requiring artificial intelligence companies contracting with the state to implement safety and privacy guardrails. The Democratic governor's move builds on California's leadership in tech regulation, following its pioneering AI transparency law for major companies.

Under the order, government contractors must disclose policies on preventing exploitation, including measures against child sexual abuse materials. The state will scrutinize whether AI models are used for surveillance or censorship and evaluate bias mitigation efforts. Companies will also need to explain how their systems handle monitoring and content blocking.

Newsom's directive also establishes independence from federal contracting standards. If the Pentagon designates an AI company as a supply chain risk, California will conduct its own assessment before making decisions. This follows tensions between the Pentagon and Anthropic, where the Defense Department terminated a contract after the AI startup restricted military use of its models for surveillance and autonomous weapons. The order additionally mandates watermarking for state-generated AI videos to combat misinformation.