On March 30, 2026, Governor Gavin Newsom signed Executive Order N-5-26 (the “Order”), directing California state agencies to develop new certification requirements and procurement standards for companies seeking to provide AI-enabled products or services to the state.1 The Order represents the latest move in an intensifying contest between California and the federal government over the future of AI regulation in the United States.
The Order is legally modest in its ambition: it directs the Department of General Services and the Department of Technology (collectively, the “Departments”) to submit recommendations within 120 days for new vendor certifications that may be incorporated into state contracting processes. These certifications would require vendors to attest to and explain their policies and safeguards concerning the exploitation or distribution of illegal content, harmful model bias, and violations of civil rights and civil liberties. The Order also requires the Department of Technology to issue best practice guidance on watermarking AI-generated or significantly manipulated images and video.
As a practical matter, the Order can be seen as a direct counterpoint to the Trump administration’s deregulatory posture on AI. The Order arrives at a critical inflection point in the federal-state contest over AI governance, and its practical significance extends well beyond Sacramento. The Golden State is home to 33 of the top 50 AI companies and commands the world’s fourth-largest economy. Not all of those businesses contract with California, but larger companies may adopt these requirements into their contracting, and smaller companies may adopt these standards to credential their products. Given the scale of the California AI economy, the Order may join the Colorado Artificial Intelligence Act as a lodestar for what are deemed “best practices” nationally.
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