Artificial intelligence (AI) remains one of the most consequential issues before the California Legislature in 2026.
Following an active 2025 session that produced sweeping new AI laws — including guardrails for frontier models, companion chatbots, and generative AI watermarking — lawmakers are now turning to implementation, clarification, and potential expansion. The question is no longer whether California should regulate AI, but how to do so in a way that protects Californians while reinforcing the state’s economic leadership.
This year’s debate presents an opportunity to focus California’s AI policy on three priorities: responsible adoption, workforce readiness, and long-term competitiveness.
Adoption: Ensuring AI Benefits Reach Across the Economy
California is home to the world’s leading AI companies, but its broader economic strength depends on whether businesses, public agencies, and workers can deploy AI tools responsibly and effectively.
As legislators consider additional compliance requirements in 2026 — including proposals to regulate high-risk uses of AI — California should ensure any such framework is workable in practice. Risk-based legislation can be effective when it targets clearly defined, high-impact uses and assigns obligations to actors based on their role in the AI value chain. Overly broad or ambiguous classifications, however, could unintentionally capture routine enterprise tools and slow responsible adoption across sectors.
AI policies must reflect the different roles of the varying types of companies that create and use AI tools. These distinct roles matter because each type of company will know different information, which determines the actions they’ll take to identify and mitigate potential risks. For example, a developer can assess risks involved in training an AI model, but a deployer is best positioned to understand risks arising from how an AI system is actually used. Aligning obligations with each actor’s role strengthens accountability and helps ensure legislation is workable in practice.
When policies are clear and practical, businesses across sectors — from manufacturing and logistics to health care and energy — can use AI to improve productivity, efficiency, and service delivery.
Workforce Readiness: Building Agility for an AI-Enabled Economy
Workforce readiness is already a central focus of California’s AI policy discussions. Lawmakers, educators, labor leaders, and employers are actively examining how AI will reshape jobs, create new pathways, and shift skill demands across industries.
AI will generate opportunity — and it will also change how work is performed. The most important priority is building the agility to respond as those changes unfold.
That agility requires a skills-based approach to talent at scale. As AI reshapes tasks within roles, workforce systems must become more responsive — identifying in-demand skills, enabling faster transitions between roles, and aligning education and training with evolving candidate, incumbent worker, and employer needs. Moving beyond static job categories toward more granular skills frameworks will allow California to adapt in real time.
Better skills data is essential. With clearer and more timely insight into emerging competencies and regional demand, community colleges and training providers can update curricula more quickly, workforce boards can target investments more precisely, and workers and candidates can make informed decisions about career mobility. High-quality, modern labor market intelligence enables smarter policy and faster action.
Business Software Alliance (BSA) member companies are contributing to this effort across California. Technology companies are partnering with community colleges and universities, expanding access to industry-recognized credentials, supporting apprenticeship and work-based learning programs, and developing tools that help employers and educators better understand skills demand. These initiatives complement state-led efforts and help scale employer-aligned pathways into AI-enabled roles.
Preparing Californians for an AI-driven economy requires a workforce system designed for speed, flexibility, and data-driven decision-making. By strengthening skills-based approaches and modernizing workforce data systems, California can build the agility needed to navigate both the opportunities and disruptions brought by AI.
Competitiveness: Preserving California’s Leadership
California’s leadership on AI reverberates nationally and globally. Businesses, investors, and policymakers are watching how the state balances innovation with accountability.
Regulatory certainty is essential and can promote responsible AI adoption. However, duplicative or unclear compliance structures could slow enterprise AI adoption and deter investment. A stable framework grounded in commonsense safeguards and clearly assigned responsibilities will reinforce California’s position as both an innovation leader and a trusted regulator.
Competitiveness depends not only on inventing AI technologies, but also on creating an environment where businesses can deploy them responsibly and at scale. Clear rules, a skilled workforce, and predictable governance will help ensure California remains the premier location for AI-driven growth.
A Defining Year for California AI Policy
The 2026 legislative session is an inflection point. With foundational AI laws now on the books, lawmakers have the opportunity to refine and strengthen California’s framework — not simply expand it.
By ensuring regulations are clearly scoped and practical, differentiating responsibilities across the AI ecosystem, investing in workforce readiness, and preserving regulatory certainty, California can demonstrate that innovation and accountability are not competing goals.
California can lead not only in developing AI technologies, but in deploying them responsibly and at scale.
BSA looks forward to working with lawmakers, legislative staff, member companies, and stakeholders throughout the session to advance policies that protect Californians while strengthening adoption, workforce readiness, and competitiveness. Read more here about BSA’s Enterprise AI Adoption Agenda for all 50 US states.