California's AI Landscape: Laws, Jobs, and Environmental Challenges

Image credit: Jernej Furman

As technology advances, artificial intelligence has moved from niche tools to everyday essentials, now just a tap away on your screen. From AI assistants like ChatGPT to AI-driven features embedded in Google’s search results, these technologies are no longer reserved for tech experts. They're reshaping how we work, learn, and connect, influencing everything from writing emails to planning meals. However, the rapid integration of AI raises important questions about its societal impact — particularly in California, where the intersection of technology, policy, industry, and ethics creates both opportunities and challenges. This article will explore not only the potential benefits of AI, but also the legal, economic, and environmental implications of its widespread use.

Recent AI Laws and Policies

In September, Governor Gavin Newsom signed more than a dozen AI-related bills into law, addressing multiple concerns regarding AI. AB-2013, effective in 2026, will require generative AI companies to disclose information about the datasets used to train their models, ensuring transparency and accountability. Laws like SB-896 address public safety by mandating risk analyses of generative AI’s potential dangers to critical infrastructure. Meanwhile, AB-3030 and SB-1120 set guidelines for the responsible use of AI in healthcare, focusing on transparency in patient interactions and ensuring oversight by licensed professionals.

The state has also expanded its privacy framework through AB-1008, regulating how generative AI systems handle personal data, and introduced laws like SB-942 to mandate watermarking of AI-generated content for easier identification. Other efforts, such as AB-2876 and SB-1288, focus on integrating AI literacy into education. Additionally, California has addressed pressing issues like deep fake pornography, election manipulation, and the entertainment industry’s use of AI, highlighting its proactive approach to balancing innovation with ethical considerations and public safety.

However, there has been significant controversy over Newsom’s decision to veto SB-1047, a bill led by Senator Scott Wiener, a San Francisco Democrat. The bill aimed to require large AI models — such as ChatGPT, LLaMA 3, and Google’s Gemini — to undergo mandatory risk assessments for dangers like enabling bioweapons attacks. The bill was designed as a preemptive measure to ensure that AI development is accompanied by thoughtful safety evaluations to mitigate serious risks before they become reality. Critics argue that Newsom’s choice reflects an effort to appease Silicon Valley’s powerful tech companies and their political supporters, including House Democrats representing districts with major AI hubs like the Bay Area. This perspective suggests that Newsom’s veto was not just a policy decision but a move influenced by the financial and political clout of tech companies eager to avoid regulatory constraints.

On the other hand, opponents of SB-1047 and supporters of the veto argue that this will allow for more flexibility, giving companies the freedom to innovate without the fear of burdensome regulations stifling progress. They claim that such oversight could hinder the pace of AI development in a state that prides itself on being a global leader in technological innovation. However, those critical of Newsom’s decision see it as a missed opportunity to take a bold stance on ensuring AI is developed responsibly, with safety measures that address both current and future risks, particularly as the technology becomes more deeply embedded in everyday life.

AI’s Role in the Job Market

The tech industry faced massive layoffs earlier this year, with thousands of workers losing their jobs due to stricter investor demands and over-hiring during the pandemic. While these cuts initially painted a grim picture, the shift toward artificial intelligence is creating new opportunities in a range of industries. Many companies are pivoting to AI-focused ventures, leading to a surge in demand for workers skilled in AI-related fields. In Silicon Valley and emerging hubs like Silicon Beach, startups and established firms alike are actively hiring for roles in AI development, data science, and even creative positions that involve training generative AI tools.

AI’s rapid expansion is being likened to a "gold rush,” as new companies and job opportunities emerge daily, according to Tom Case, founder of Atticus Growth Partners. Many laid-off tech workers are retraining in AI technologies like Python programming and machine learning to transition into high-demand roles. Computer and mathematical occupations, including AI-related positions, are projected to grow by 12.9%, making them one of the fastest-growing sectors.

In response to this growth, more students in California are pursuing careers in AI, with particular interest in AI theory and its practical applications. To support this trend, Governor Gavin Newsom recently announced a statewide partnership with Nvidia to introduce AI-focused curriculum, resources, and opportunities to public colleges and universities. The initiative will begin with community colleges, with plans to expand AI education to the CSU and UC systems in the future. Universities and platforms like Salesforce’s Trailhead are also expanding AI education to prepare the workforce for these changes. While concerns remain about AI’s potential to displace traditional jobs, from coding to acting, the evolving industry seems to be balancing job creation with displacement, offering new opportunities for those willing to adapt. To ensure that an AI-driven future benefits everyone, it will be essential to create inclusive policies that address these shifts, supporting workers and communities vulnerable to the disruptions AI may cause.

The creativity industries are particularly vulnerable to AI disruption. The “creator economy,” valued at around fourteen billion dollars annually, has long been thought to rely on uniquely human qualities, making it less susceptible to technological change. However, generative AI models, like ChatGPT and MidJourney, are challenging this notion. These tools can produce content across various mediums, including text, images, and audio, often blurring the lines between human-created and machine-generated works. I recently spoke with a friend pursuing a career in graphic art, who expressed strong opposition to generative AI, worried that it is pushing artists out of their own field. This growing concern is compounded by increasing distrust over the authenticity and origin of AI-generated art.

These concerns are not unfounded. In 2023, several high-profile lawsuits were filed against major AI models, including Stable Diffusion, MidJourney, OpenAI, GitHub, and Microsoft, alleging copyright infringement. These cases highlight the growing tension between rapidly advancing AI technology and existing intellectual property laws, which are struggling to keep pace with these innovations. Many AI systems are trained on vast datasets, often incorporating copyrighted material, raising questions about ownership, consent, and fair use. As AI continues to evolve, courts will have to navigate these legal gray areas to determine whether current laws are adequate or in need of reform to address the unique challenges posed by AI-generated content.

A Vampire on the Environment

One final concern, especially for those in California, is the lesser discussed risk of AI’s environmental impact. More recently, this has come to people’s attention as fires in California continue to burn and fire hydrants have recently run dry in these areas. This was later explained to not be connected directly to AI and largely due to the demand for unprecedented amounts of water from hydrants at the time. However, with the high demand for water and the ever-present water crisis in California, this has sparked a conversation regarding the amount of water AI data centers consume. 

California, home to a growing number of AI data centers, is at the forefront of meeting the immense energy demands of artificial intelligence and cloud computing. These facilities, housing powerful servers critical to the global economy, consume vast amounts of electricity, with some requiring a gigawatt or more — equivalent to powering cities with hundreds of thousands of residents, according to CNBC analysis. As land and power supplies become more constrained, developers are working to balance expansion with the challenges of grid reliability, environmental impact, and rising energy costs in surrounding communities.

Data centers, in general, utilize massive amounts of water to keep them cool. California is home to at least 239 data centers and one study shows that a large data center can consume up to 5 million gallons of water per day, or as much as a town of 50,000 people. AI data centers consume even more. The Washington Post found that Meta used 22 million liters of water, and that was only to train its open source AI model.

On top of keeping the data centers cool, the energy consumption itself is a concern. Despite efforts to incorporate renewable energy, the data centers have a reliance on natural gas, which remains a short-term solution to ensure the reliability required for these facilities — contributing to the ever-increasing worries of climate change, especially with the energy needs for such facilities.

AI data centers in California are driving innovation and growth but also raising significant sustainability and infrastructure concerns. While tech companies have made strides in adopting renewable energy and major tech companies are some of the largest purchasers of renewable energy, they have begun to turn to nuclear for more consistent sources of electricity. The scale and consistency required for these facilities often outpace what renewables alone can provide. Developers are exploring ways to integrate carbon capture and energy storage to mitigate the environmental costs, but the expansion of data centers has temporarily disrupted emissions targets for many companies. As demand for AI continues to grow, ensuring these centers contribute positively to the grid while addressing long-term environmental goals will require strategic collaboration between technology firms, utility providers, and government policies.

Beyond the Headlines

Beyond the headlines, AI’s true impact lies in its daily integration and unforeseen ripple effects. In California, AI isn’t just transforming tech hubs but also redefining industries, complicating global issues like climate change, and reshaping the arts in ways that could be detrimental. As these tools become more accessible, they streamline tasks and address challenges, but they also raise critical ethical, social, and environmental concerns. For California to remain a leader in innovation, it must balance AI’s benefits with proactive measures to mitigate its risks and ensure these advancements benefit everyone.