California Passes New AI Laws

In Tuesday’s blog, I mentioned the California Legislature’s busy session that wrapped up at the end of August. The legislature passed a lot of new AI laws. These ranged from simple amendments in the scope of the AI Transparency Act to brand-new bans on certain AI products. All of these laws are still awaiting the governor’s signature, and given his reluctance to sign AI legislation in the past, vetoes are a real possibility. A recent Wiley memo summarizes the legislative activity, stating:

“The measures – which span AI transparency, employment decisions, privacy practices, use of chatbots, health care services, children’s online protections, and more – will have wide-ranging effects on companies doing business in California, if and when they are signed into law by the Governor.

The California Legislature’s 2026 session underscores the state’s continued focus on privacy and AI regulation. The AI package reflects a growing focus on high-impact use cases, including employment decisions and consumer-facing interactions involving chatbots and digital replicas, while reinforcing the importance of human oversight in consequential decision-making.”

I’ll touch on a few highlights, but for a full list of key legislative activity, consult the Wiley memo. One law which will impact many companies is SB 947. This is a new ban on the use of automated decision making systems for employment actions related to disciplinary and termination decisions. Another, SB 867, is more niche but includes a novel ban on children’s toys containing AI chatbots. Finally, one that impacts us lawyers, SB 574. This law contains new restrictions on how attorneys can use AI in court filings.

Ultimately this flurry of legislative activity reflects growing fears and anxieties about AI’s role in society. We can expect more states to follow suit. If you’re hedging your bets on AI its worth keeping up with these developments. Companies can spend a lot of time and money developing system that ultimately end up being banned.