Key Takeaways:
- California has been actively regulating Big Tech, but many laws have been watered down due to aggressive lobbying by tech companies.
- The state has seen some victories in regulating tech, including a new browser setting to forbid websites from transferring personal data.
- The tension between protecting Californians from artificial intelligence and protecting the flow of money into the industry is expected to continue in 2026.
- California’s executive branch has struggled with guarding against online hackers and law enforcement agencies have struggled to handle digital data correctly.
- The state is expected to see continued controversy over data centers, AI use, and algorithmic pricing in the coming year.
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Regulating Big Tech in California
In 2025, California showed its commitment to regulating Big Tech, but the outcome was a barrage of laws that were often watered down. For example, a bill aimed at keeping artificial intelligence systems from enabling catastrophes like biological weapons attacks was vetoed by Governor Gavin Newsom due to concerns that it would stifle innovation in the state’s booming AI industry. A revised version of the bill was later signed into law, but it only requires big AI companies to publish safety frameworks and creates a pathway for reporting safety incidents. Similar dilutions occurred with other tech proposals, including bills to regulate data centers and AI chatbots talking to kids.
Lobbying and Regulation
The watering down of these laws was largely due to aggressive lobbying by tech companies. Despite this, advocates for more regulation won some outright victories, including a new browser setting to forbid websites from transferring personal data. This "opt out" is expected to help consumers across the U.S. However, the process of regulating tech in California is complex and often contentious, with many stakeholders vying for influence. The state’s executive branch has also struggled with the process of guarding against online hackers, losing its top cybersecurity official amid discord in the office that position oversees.
Challenges in Law Enforcement
Law enforcement agencies across the state have also struggled to correctly handle the digital data they collect. Many local police departments have been found to be illegally sharing information on vehicle movements, gleaned from automated license plate readers, with federal agencies like Border Patrol and Immigration and Customs Enforcement. This has raised concerns about privacy and the potential for abuse of power. As the use of technology in law enforcement continues to grow, it is likely that these issues will become increasingly important.
2026 Outlook
In 2026, the tension between protecting Californians from artificial intelligence and protecting the flow of money into the industry is expected to continue. An ambitious bill requiring disclosure of AI use in consequential decisions, such as in housing and education, will return. Data centers will also stir controversy as AI spikes their power use, potentially opening the door to nuclear power. Additionally, the Trump administration and Republicans in Congress have drawn up proposals to preempt state laws regulating AI, which could have a significant impact on California if enacted.
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