On October 13, 2025, Governor Gavin Newsom signed SB 243, the first U.S. state law setting comprehensive rules for “companion chatbots” in California: operators must disclose chatbot identity (with reminders to minors every three hours), may not imply licensed medical/professional status, must prevent sexual content with minors, detect self‐harm and provide crisis referrals, and begin annual reporting to the California Office of Suicide Prevention on July 1, 2027; many provisions take effect January 1, 2026. The law creates a private right of action (damages, injunctive relief, attorneys’ fees), raising litigation, compliance and operational costs—prompting firms to revise product definitions, age‐verification, safety engineering, transparency and reporting processes and set aside budgets for liability. Key uncertainties include the “reasonable person” standard, scope of “companion” exclusions, and potential interaction with pending federal proposals.

On 2025-07-01 the U.S. Senate voted 99–1 to remove a proposed 10-year moratorium on state AI regulation from a major tax and spending bill, preserving states’ ability to pass and enforce AI-specific laws after a revised funding-limitation version also failed; that decision sustains regulatory uncertainty and keeps states functioning as policy “laboratories” (e.g., California’s SB-243 and state deepfake/impersonation laws). The outcome matters for customers, revenue and operations because fragmented state rules will shape product requirements, compliance costs, liability and market access across AI, software engineering, fintech, biotech and quantum applications. Immediate priorities: monitor federal bills and state law developments, track standards and agency rulemaking (FTC, FCC, ISO/NIST/IEEE), build compliance and auditability capabilities, design flexible architectures, and engage regulators and public comment processes.

Between July and September 2025 the US reshaped its AI policy: on July 1 the Senate voted 99–1 to remove a provision that would have imposed a 10‐year ban on state AI regulation, preserving state authority; on July 23 the White House unveiled “Winning the AI Race: America’s AI Action Plan” (Executive Order 14179) with more than 90 federal actions across three pillars—accelerating innovation, building AI infrastructure, and international/security priorities—including an export strategy, streamlined data‐center permitting, deregulatory reviews, and procurement standards requiring models “free from ideological bias”; and on Sept. 29 California enacted SB 53, mandating public disclosure of safety protocols, whistleblower protections, and 15‐day reporting of “critical safety incidents.” These moves shift influence from federal bans to federal incentives and procurement, create new compliance and contracting risks for companies, and warrant immediate monitoring of Action Plan implementation, permitting reforms, procurement rules, state responses, and definitions of “ideological bias.”