California Gov. Gavin Newsom signed the California AI bill into law on Monday, requiring leading AI companies to disclose safety details about their most advanced systems, placing the state once again at the forefront of tech regulation. Those in support of the new law, Senate Bill 53, known as the Transparency in Frontier Artificial Intelligence Act, highlight that it provides the needed safeguards while still allowing innovation to flourish. Critics warn it could impose compliance burdens that will ripple through the industry nationwide. This AI law could establish a new baseline for AI standards across the United States. The California AI bill could mark the start of a “Sacramento effect” in AI. Proponents argue the bill increases accountability without stifling innovation. By focusing on transparency, it avoids freezing a rapidly evolving field. Chris Lehane, chief global affairs officer at OpenAI, posted on LinkedIn that the law “lays out a clearer path to harmonize California’s standards with federal ones. Detractors, particularly some industry voices, caution that the reporting requirements could be onerous for startups and tilt the playing field toward established giants that already employ large compliance teams. Collin McCune, head of government affairs at the venture firm Andreessen Horowitz, echoed the concerns with fragmentation posting on X: “The biggest danger of SB 53 is that it sets a precedent for states, rather than the federal government, to take the lead in governing the national AI market – creating a patchwork of 50 compliance regimes that startups don’t have the resources to navigate.”