California Gov. Gavin Newsom issued an executive order on Sept. 6 to study the development, use and risks of AI technology throughout the state and to develop a process for evaluating and deploying AI within state government.

“We recognize both the potential benefits and risks these tools enable,” Newsom said in a press release. “We’re neither frozen by the fears nor hypnotized by the upside. We’re taking a clear-eyed, humble approach to this world-changing technology. Asking questions. Seeking answers from experts.”

The executive order directs state agencies and departments to perform a joint analysis on how AI could affect various aspects of life in the state, such as the energy sector and vulnerable communities. It also calls for a “procurement blueprint” to support an innovation ecosystem inside state government. Agencies will issue general guidelines for public sector procurement, uses and required training for the application of generative AI.

While the executive order won’t immediately impact private employers, it will have a “spillover effect” they need to be aware of, Benjamin Ebbink and Richard Meneghello of law firm Fisher Phillips wrote in a JDSupra blog post.

The order establishes a formal partnership with the University of California, Berkeley and Stanford University to consider and evaluate the impacts of generative AI on California. The state and the institutions will develop and host a joint summit in 2024 to discuss the impacts of generative AI on California and its workforce.

It also calls for the state to engage with legislative partners and key stakeholders in a formal process to develop policy recommendations for responsible use of AI, including any guidelines, criteria, reports and/or training.

The administration will work throughout the next year to implement the provisions of the executive order and engage the legislature and stakeholders to develop policy recommendations.

Roadmap for Employers

Referring to the executive order as “groundbreaking,” the Fisher Phillips post said it is “charting a course for the business community given the explosion of artificial intelligence use across all industry sectors — and employers should use this development to take their own steps to prepare for a new tomorrow.”

The law firm advises 10 steps employers should take in response to the AI executive order:

  1. Conduct an AI audit
  2. Engage critical stakeholders
  3. Develop an AI strategy
  4. Employee training
  5. Coordinate with counsel
  6. Create comprehensive AI policies
  7. Beef up your data protection measures
  8. Review procurement policies
  9. Deploy pilot testing
  10. Monitor regulatory updates

“The coming months are likely to see the release of comprehensive reports and guidelines that will influence not just California but potentially set a standard for AI governance across the country,” the blog post states. “Given that the executive order urges legislative bodies to create new AI policies, you should stay alert to new laws and regulations that could affect your business operations.”