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Bill

AB 2653

State contracts: report: modern foundation models and associated artificial intelligence systems.

2025-2026 Regular Session Introduced by Alex Lee

California bill requires state contractors to certify compliance with ethical AI labor standards to bid on government contracts, leveraging procurement as a regulatory tool.

In committee: Held under submission.
#statecontracts #modernfoundationmodelsandassociatedartificialintelligencesystems #report
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Bill Summary · AB 2653

Legislative bill overview

AB 2653 establishes a certification process requiring companies contracting with California state government to comply with a "Sweatfree AI Code of Conduct." The bill creates standards for ethical AI practices and labor protections that vendors must meet to secure state contracts, with certification handled through a state agency process.

Why is this important

As state governments become major purchasers of AI services and technologies, procurement standards can drive industry-wide practices affecting workers and consumers. This bill attempts to leverage California's purchasing power to enforce labor and ethical standards in AI development and deployment—a relatively novel regulatory approach that could influence how companies operating in the state develop AI systems.

Potential points of contention

  • Definition ambiguity: The "Sweatfree AI Code of Conduct" lacks clear definition in the bill summary, creating uncertainty about what specific practices constitute compliance and how enforcement would work
  • Compliance burden: Smaller vendors and contractors may face significant costs implementing certification processes, potentially pricing them out of state contracts and reducing competition
  • Scope concerns: The bill's coverage of "AI" is potentially broad and undefined—modern software increasingly incorporates AI elements, which could create compliance obligations for numerous vendors beyond those primarily developing AI systems
  • International trade implications: Requirements could conflict with federal procurement rules or trade agreements if they effectively discriminate against out-of-state or foreign vendors

Compiled from official sources — confirm details with the bill’s official record.

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