Report from CNBC
In Brief – California Governor Gavin Newsom (D) has signed SB 947, the No Robo Bosses Act, making California the first state to prohibit employers from relying solely on artificial intelligence to discipline or fire workers. Employers that heavily use AI output in such decisions must have a human reviewer corroborate the decision using additional information. Employees must also receive written notice that AI was primarily used, a description of the data involved, and a human contact who can explain the decision. Newsom vetoed an earlier version in 2025, citing overly broad notification requirements, and legislative sponsors subsequently removed advance-notice provisions and protections for gig workers, helping secure the governor’s approval. The bill’s collection of new obligations applies when an employer ‘primarily relies’ on an automated decision system, but critics argue that the term is not defined in the legislation.
Context – When the second Trump Administration took over with a far bigger cohort of tech backers than the first, US AI policy was pushed so firmly in the direction of deregulation and investment that the global regulatory dynamic shifted. Encouraging investment and innovation was king. Even the EU, home of the AI Act, has delayed some implementation timelines and proposed some AI regulatory refinements in its Digital Omnibus. The pendulum is now swinging back, with regulatory activity in the US being key because the US continues to attract the most investment and a deregulatory climate in the US threatens investment in other markets. The biggest driver in the US is voter polls showing that Democrats and Republicans, inundated by science fiction-type AI warnings, are worried, and many US states are now responding with AI regulation. The three-year arc in California is instructive. In 2024, Governor Newsome vetoed a major AI safety bill and in 2025 he signed a toned-down version. This year dozens of AI bills passed the state legislature, and several have been signed into law. Nationally, the political calculus points to federal legislation remaining a longshot, we think until 2029.