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AB-2653 • 2026

State contracts: report: modern foundation models and associated artificial intelligence systems.

State contracts: report: modern foundation models and associated artificial intelligence systems.

Labor Technology
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Lee
Last action
Official status
Assembly - Appropriations
Effective date
Not listed

Plain English Breakdown

The bill defines 'data enrichment services' broadly but does not list every specific AI product covered; it depends on whether data enrichment is needed for production.

State Contracts and AI Labor Standards Report

This law creates a working group to study labor practices in artificial intelligence, requires new rules for state contracts involving AI data work, and updates the definition of sweatshop labor.

What This Bill Does

  • Creates a nine-member Foundation Model Labor and Procurement Working Group to assess labor practices behind modern foundation models and recommend how the state should include labor standards in buying decisions.
  • Requires the working group to submit a report with findings and recommendations to the Legislature by December 31, 2027.
  • Requires contractors for AI products needing data enrichment services to certify that their work was not produced using sweatshop or forced labor.
  • Updates the contractor responsibility program to include a 'Sweatfree AI Code of Conduct' by July 1, 2027, which bidders on state contracts must sign.
  • Requires contractors and subcontractors for these AI products to pay workers at least a living wage and ensure workplaces are free from psychological harms.
  • Redefines 'sweatshop labor' to include work that violates the conditions in the Sweatfree AI Code of Conduct.

Who It Names or Affects

  • State agencies buying artificial intelligence products or services that require data enrichment.
  • Contractors and subcontractors bidding on state contracts for these specific AI projects.
  • Workers performing tasks like content moderation, data labeling, model training, evaluation, AI Fauxtomation, or data annotation.

Terms To Know

Foundation models
Modern artificial intelligence systems at the frontier of development that are being studied for labor practices in this bill.
Data enrichment services
Services used to create, deploy, or test AI models to ensure safe data, including content moderation, labeling, training, evaluation, and annotation.
Sweatfree AI Code of Conduct
A set of rules for state contracts requiring fair wages, psychological safety, and no forced or sweatshop labor in the production of certain AI products.

Limits and Unknowns

  • The bill requires a report on recommendations but does not immediately mandate specific procurement standards beyond the certification requirements.
  • The final details of how independent monitoring will work depend on future updates to the contractor responsibility program by July 1, 2027.

Bill History

  1. California Legislative Information

    Assembly - Appropriations

Official Summary Text

State contracts: report: modern foundation models and associated artificial intelligence systems.