California Gov. Gavin Newsom's recent executive order directing state agencies to implement guardrails for contracting with artificial intelligence companies marks a rift with the Trump administration's deregulatory approach that could proliferate across other states.
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Despite the Trump administration's preferences for a national framework that prioritizes innovation over all else, California is uniquely positioned to lead the charge for more AI safeguards in state-level contracting, given its market presence and experience legislating on AI-related issues.
"California is the largest state by GDP within the United States, so that aspect alone means its government can exercise a lot of influence over any company that wants to do business with it, because it just commands such a large budget," said Michael Montalbano, a government contracts partner with Blank Rome LLP. "But in addition to that, AI is really centered around California and Silicon Valley, so California exercises more influence over those companies than another state where they aren't located."
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"Calif. AI Guardrails Split From Feds, Other States May Follow," by Madeline Lyskawa, was published in Law360 on April 9, 2026.