OpenAI Urges Newsom to Harmonize California AI Rules With Federal Standards

OpenAI has sent a letter to California Governor Gavin Newsom calling on the state to align its AI regulation with federal and global standards, warning that roughly 1,000 AI-related bills are moving through state legislatures this year and could produce a patchwork of inconsistent rules.

The company argues the US faces "an increasingly urgent choice on AI: set clear national standards, or risk a patchwork of state rules" that "could slow innovation without improving safety." The letter, disclosed publicly by OpenAI, positions California as the pivotal actor in resolving that choice, since the state hosts many of the world's leading AI companies and stands as the world's fourth-largest economy.

The stakes are economic as well as regulatory. OpenAI cites its recent California Economic Impact Report, which found the AI sector is "adding billions to the state's budget" and could deliver further jobs and growth — but only if the state keeps creating conditions for AI to thrive.

A specific compliance proposal

OpenAI's central recommendation is concrete: California should treat frontier model developers as compliant with state requirements when they have entered a safety-oriented agreement with a relevant US federal agency, or when they have signed onto a parallel framework such as the EU's AI Code of Practice, which OpenAI says it has also signed.

The relevant federal body is the newly created Center for AI Standards and Innovation (CAISI). OpenAI states it recently became "one of the first large language model companies to commit to working with the US government and its new Center for AI Standards and Innovation (CAISI) to evaluate frontier models' national security-related capabilities." In the letter, the company urges avoiding "duplication and inconsistencies between state requirements and the safety frameworks already being advanced by the US government and our democratic allies."

In practice, the proposal would let a company that has cleared federal safety review skip duplicative state-level scrutiny — an approach that shifts oversight toward Washington while reducing the compliance surface for large developers operating across many states.

A warning about small developers

The letter also asks California to keep shielding smaller developers and startups from compliance burdens designed for larger companies. "Large firms can absorb those costs; early-stage teams often cannot," OpenAI writes. The company argues that exempting smaller developers from duplicative state rules would help keep California's AI ecosystem vibrant.

OpenAI reaches for a pointed historical analogy: it does not want the state to "inadvertently create a 'CEQA for AI innovation.'" The 1970 California Environmental Quality Act, the letter notes, "made it dramatically harder to build housing in the state because its broader impacts weren't well understood." The implication is that a well-intentioned AI statute could similarly entrench itself and cause California to drop "from leading in AI to lagging behind other states or even countries."

The letter invokes the Space Race as well, asking readers to imagine how hard it would have been to win "if California's aerospace and tech industries had been tangled in state-by-state regulations impeding transistor innovation."

The geopolitical framing

A significant portion of the letter frames the regulatory question as a contest between democratic and autocratic AI. Aligning California with US federal standards, OpenAI argues, supports "the strategic imperative to build on US-led, democratic AI and not autocratic AI."

The company contends that AI firms in the People's Republic of China "aren't likely to abide by US state laws — and will actually benefit from patchwork regulations that bog down their US competitors in inconsistent standards."

OpenAI, describing itself as a nonprofit dedicated to building AI that benefits all of humanity, says that "building democratic AI anchored in democratic values, inclusive of safety standards, is foundational to our mission." That mission includes "ensuring broad access to AI so its benefits reach as many people as possible — not just a few."

A consistent lobbying line

The letter continues an established OpenAI position. The company points to previous submissions to Governor Newsom and to CEO Sam Altman's recent testimony on Capitol Hill, where OpenAI has "consistently argued that consistent federal guidelines are the best way to spur innovation, level the playing field for start-ups, and maintain America's edge over the PRC."

The timing matters. With roughly 1,000 AI bills in play across state legislatures this year, the preemption question — federal standards versus state-by-state rules — has become one of the defining policy fights in AI governance. California, given its economic weight and concentration of frontier labs, effectively sets a de facto template other states follow, which makes Newsom's response to the letter a signal for the national debate.

OpenAI closes on that note: "In the Intelligence Age, clarity on AI isn't optional — it's essential to keeping California and the country ahead."