Business
California backs down on AI laws so more tech leaders don’t flee the state
California’s tech companies, the epicenter of the state’s economy, sent politicians a loud message this year: Back down from restrictive artificial intelligence regulation or they’ll leave.
The tactic appeared to have worked, activists said, because some politicians weakened or scrapped guardrails to mitigate AI’s biggest risks.
California Gov. Gavin Newsom rejected a bill aimed at making companion chatbots safer for children after the tech industry fought it. In his veto message, the governor raised concerns about placing broad limits on AI, which has sparked a massive investment spree and created new billionaires overnight around the San Francisco Bay Area.
Assembly Bill 1064 would have barred companion chatbot operators from making these AI systems available to minors unless the chatbots weren’t “foreseeably capable” of certain conduct, including encouraging a child to engage in self-harm. Newsom said he supported the goal, but feared it would unintentionally bar minors from using AI tools and learning how to use technology safely.
“We cannot prepare our youth for a future where AI is ubiquitous by preventing their use of these tools altogether,” he wrote in his veto message.
The bill’s veto was a blow to child safety advocates who had pushed it through the state Legislature and a win for tech industry groups that fought it. In social media ads, groups such as TechNet had urged the public to tell the governor to veto the bill because it would harm innovation and lead to students falling behind in school.
Organizations trying to rein in the world’s largest tech companies as they advance the powerful technology say the tech industry has become more empowered at the national and state levels.
Meta, Google, OpenAI, Apple and other major tech companies have strengthened their relationships with the Trump administration. Companies are funding new organizations and political action committees to push back against state AI policy while pouring money into lobbying.
In Sacramento, AI companies have lobbied behind the scenes for more freedom. California’s massive pool of engineering talent, tech investors and companies make it an attractive place for the tech industry, but companies are letting policymakers know that other states are also interested in attracting those investments and jobs. Big Tech is particularly sensitive to regulations in the Golden State because so many companies are headquartered there and must abide by its rules.
“We believe California can strike a better balance between protecting consumers and enabling responsible technological growth,” Robert Boykin, TechNet’s executive director for California and the Southwest, said in a statement.
Common Sense Media founder and Chief Executive Jim Steyer said tech lobbyists put tremendous pressure on Newsom to veto AB 1064. Common Sense Media, a nonprofit that rates and reviews technology and entertainment for families, sponsored the bill.
“They threaten to hurt the economy of California,” he said. “That’s the basic message from the tech companies.”
Advertising is among the tactics tech companies with deep pockets use to convince politicians to kill or weaken legislation. Even if the governor signs a bill, companies have at times sued to block new laws from taking effect.
“If you’re really trying to do something bold with tech policy, you have to jump over a lot of hurdles,” said David Evan Harris, senior policy advisor at the California Initiative for Technology and Democracy, which supported AB 1064. The group focuses on finding state-level solutions to threats that AI, disinformation and emerging technologies pose to democracy.
Tech companies have threatened to move their headquarters and jobs to other states or countries, a risk looming over politicians and regulators.
The California Chamber of Commerce, a broad-based business advocacy group that includes tech giants, launched a campaign this year that warned over-regulation could stifle innovation and hinder California.
“Making competition harder could cause California companies to expand elsewhere, costing the state’s economy billions,” the group said on its website.
From January to September, the California Chamber of Commerce spent $11.48 million lobbying California lawmakers and regulators on a variety of bills, filings to the California secretary of state show. During that period, Meta spent $4.13 million. A lobbying disclosure report shows that Meta paid the California Chamber of Commerce $3.1 million, making up the bulk of their spending. Google, which also paid TechNet and the California Chamber of Commerce, spent $2.39 million.
Amazon, Uber, DoorDash and other tech companies spent more than $1 million each. TechNet spent around $800,000.
The threat that California companies could move away has caught the attention of some politicians.
California Atty. Gen. Rob Bonta, who has investigated tech companies over child safety concerns, indicated that despite initial concern, his office wouldn’t oppose ChatGPT maker OpenAI’s restructuring plans. The new structure gives OpenAI’s nonprofit parent a stake in its for-profit public benefit corporation and clears the way for OpenAI to list its shares.
Bonta blessed the restructuring partly because of OpenAI’s pledge to stay in the state.
“Safety will be prioritized, as well as a commitment that OpenAI will remain right here in California,” he said in a statement last week. The AG’s office, which supervises charitable trusts and ensures these assets are used for public benefit, had been investigating OpenAI’s restructuring plan over the last year and a half.
OpenAI Chief Executive Sam Altman said he’s glad to stay in California.
“California is my home, and I love it here, and when I talked to Attorney General Bonta two weeks ago I made clear that we were not going to do what those other companies do and threaten to leave if sued,” he posted on X.
Critics — which included some tech leaders such as Elon Musk, Meta and former OpenAI executives as well as nonprofits and foundations — have raised concerns about OpenAI’s restructuring plan. Some warned it would allow startups to exploit charitable tax exemptions and let OpenAI prioritize financial gain over public good.
Lawmakers and advocacy groups say it’s been a mixed year for tech regulation. The governor signed Assembly Bill 56, which requires platforms to display labels for minors that warn about social media’s mental health harms. Another piece of signed legislation, Senate Bill 53, aims to make AI developers more transparent about safety risks and offers more whistleblower protections.
The governor also signed a bill that requires chatbot operators to have procedures to prevent the production of suicide or self-harm content. But advocacy groups, including Common Sense Media, removed their support for Senate Bill 243 because they said the tech industry pushed for changes that weakened its protections.
Newsom vetoed other legislation that the tech industry opposed, including Senate Bill 7, which requires employers to notify workers before deploying an “automated decision system” in hiring, promotions and other employment decisions.
Called the “No Robo Bosses Act,” the legislation didn’t clear the governor, who thought it was too broad.
“A lot of nuance was demonstrated in the lawmaking process about the balance between ensuring meaningful protections while also encouraging innovation,” said Julia Powles, a professor and executive director of the UCLA Institute for Technology, Law & Policy.
The battle over AI safety is far from over. Assemblymember Rebecca Bauer-Kahan (D-Orinda), who co-wrote AB 1064, said she plans to revive the legislation.
Child safety is an issue that both Democrats and Republicans are examining after parents sued AI companies such as OpenAI and Character.AI for allegedly contributing to their children’s suicides.
“The harm that these chatbots are causing feels so fast and furious, public and real that I thought we would have a different outcome,” Bauer-Kahan said. “It’s always fascinating to me when the outcome of policy feels to be disconnected from what I believe the public wants.”
Steyer from Common Sense Media said a new ballot initiative includes the AI safety protections that Newsom vetoed.
“That was a setback, but not an overall defeat,” he said about the veto of AB 1064. “This is a David and Goliath situation, and we are David.”
Business
Disney’s Dana Walden sets leadership team; Bergman remains film studios chief
Walt Disney Co.’s incoming president and chief creative officer, Dana Walden, has unveiled her leadership team, which includes several familiar faces from the company’s film, television and marketing units.
Walden will become Disney’s first female president on Wednesday. She will report to Josh D’Amaro, who will succeed Bob Iger as Disney’s chief executive, after the company’s annual meeting with shareholders and its high-profile leadership handoff.
Walden’s senior team includes her longtime creative partner, Alan Bergman. As chairman of Disney Entertainment, Studios, Bergman will continue to oversee Disney’s film studios, including production, marketing and distribution.
Bergman also will retain oversight of Disney’s streaming programming in concert with Walden.
Disney executives Joe Earley and Adam Smith were named co-presidents of Disney Entertainment’s direct-to-consumer offerings, Disney+ and Hulu. Both executives will be responsible for strategy and financial performance and report to Walden and Bergman.
Earley and Walden worked together when they were Fox executives; Earley will also serve as head of content strategy.
Smith continues in his role as Disney Entertainment chief product and technology officer. He also will continue to collaborate with ESPN Chairman Jimmy Pitaro on matters related to ESPN and ESPN+.
Debra OConnell will step into a newly formed role as chairman of Disney Entertainment Television.
She will have a broad TV portfolio that includes ABC Entertainment, Disney-branded cable channels, Hulu Originals as well as programming from National Geographic, 20th Television and 20th Television Animation.
OConnell will continue to oversee ABC News and the ABC-owned television stations, including KABC-TV Channel 7 in Los Angeles.
In a separate memo late Monday, OConnell introduced her team, including Craig Erwich, who now will oversee 20th Television and 20th Television Animation in addition to ABC Entertainment and Hulu Originals.
Several executives report to OConnnell, including Ayo Davis of Disney Branded Television; Courteney Monroe of National Geographic Content;
Almin Karamehmedovic of ABC News; Chad Matthews of ABC stations; ad executives Rita Ferro and Jimmy Zasowski (who also will report to Bergman and Pitaro); and Sean Cocchia, who overseas strategic scheduling and programming.
Disney’s incoming president, Dana Walden, has established her senior leadership team.
(Richard Shotwell / Invision/AP)
Sean Shoptaw, who serves as executive vice president for games and digital entertainment, and his organization will shift from Disney Experiences and into Walden’s division.
Shoptaw oversees Disney’s games business and its collaboration with Epic Games to develop a Disney universe connected to Fortnite.
John Landgraf remains chairman of FX and will continue to report directly to Walden.
Asad Ayaz, who is chief marketing and brand officer, has an influential remit across Disney’s various business segments. He will report to D’Amaro and Walden.
“The strength of Disney has always been the emotional connection between our stories and the people who love them,” Walden said in a statement. “As fans engage with Disney across more formats and platforms than ever before, we are bringing together the full power of our creative businesses to build an even more connected experience for audiences.”
Business
Downtown L.A. wants San Francisco’s pop-up secret to get shoppers back
As much of downtown L.A. continues to feel dark and deserted, local businesses want the city to steal San Francisco’s secret for firing up foot traffic.
The tech mecca has slowly begun to emerge from one of the country’s deepest declines in downtown retail, in part through a program that peppered the city with subsidized pop-up shops.
The Vacant to Vibrant program turned abandoned spaces into bakeries, bookstores, cafes, chocolateries, galleries and other things.
Local entrepreneurs were given grants and support from the city and charities, as well as months of free rent to set up shop. The idea is to leverage empty storefronts to build buzz and entice more shoppers to city sidewalks.
While San Francisco is still far from its pre-pandemic peaks, backers say the program has brightened struggling retail areas.
“We’re creating a window on what downtown could look like,” said Simon Bertrang, executive director of SF New Deal, the nonprofit behind Vacant to Vibrant. The hollowing-out created by COVID-19 could be an opportunity to turn downtown San Francisco into a “mixed-use neighborhood with a lot of small businesses and maybe more residential,” he said.
While San Francisco is still far from its pre-pandemic peaks, backers of Vacant to Vibrant say the program has brightened struggling retail areas.
(Justin Sullivan / Getty Images)
Both L.A. and S.F. have grappled with keeping stores and restaurants in their business districts since the pandemic emptied office buildings. While most employees are working from the office again, a significant number are still working from home, and many aren’t coming in every weekday. The diminished presence of workers continues to make it hard on the lunch spots, bars and shops that rely on them to survive.
Though it is difficult to compare how businesses are doing in each downtown, there are some indicators that San Francisco has been growing more in the last year.
Reservation platform OpenTable said online reservations in the Northern Californian city shot up more than 20% compared with most months last year. Reservation growth in L.A. was capped below 10% for most of the same period.
Downtowns across the country need to find solutions, experts warn, as dark storefronts can lead to a downward spiral, with companies hesitant to lease office space in vacant areas.
Looking down Broadway from its intersection with 7th Street in downtown in Los Angeles.
Retailers are already opting out of downtown L.A. due to its slow recovery from the pandemic shutdown, said real estate broker Derrick Moore of CBRE, who helps arrange commercial property leases.
“A lot of operators are just electing to skip over downtown,” he said. “They’re leasing spaces elsewhere, where they feel they have a greater chance at higher sales.”
Brands have headed to more vibrant, nearby neighborhoods such as Echo Park and Silver Lake because of downtown’s weaker business.
Downtown Los Angeles residents, businesses and other city boosters want to try to prime the pump, using a program like San Francisco’s to help small businesses take over vacant storefronts and turn the lights back on, said Cassy Horton, co-founder of the Downtown Residents Assn.
A pedestrian walks past a building for lease on Broadway in downtown Los Angeles.
(Etienne Laurent / For The Times)
Surveys by the group have found that what residents love most about downtown is its walkability, restaurants, bars and coffee shops, she said.
“I love being able to live a lifestyle where I can run all of my core errands within a couple blocks,” Horton said. “I don’t have a car.”
Retail property vacancy downtown could be as high as 40%, Moore said, with some neighborhoods, such as the Historic Core, suffering more than others. Nike recently closed its store on Broadway.
A worker removes a banner on Broadway. Retailers are already opting out of downtown L.A. due to its slow recovery from the pandemic shutdown, a broker said.
(Etienne Laurent / For The Times)
“Downtown’s commercial vacancy crisis is visible on every block,” a recent report by the residents’ group said.
The report called for a “safe sidewalks” public safety campaign to work in tandem with a plan to bring back retail tenants.
In San Francisco, participating businesses can get their feet wet with a three-month pop-up to test the waters in a high-traffic location with low financial overhead and technical support from SF New Deal and the mayor’s office.
Businesses are offered grants to operate, help with lease negotiations, assistance with obtaining city permits, insurance, marketing support, business mentoring, and three to six months of free rent.
The intention is to transition many of the pop-ups into long-term leases, creating permanent fixtures in the downtown landscape. So far, more than 10 of the 40 small businesses that started as pop-ups have moved on to multiyear leases with their landlords.
A boarded-up storefront on Broadway. “Downtown’s commercial vacancy crisis is visible on every block,” a recent report by the Downtown Residents Assn. said.
(Etienne Laurent / For The Times)
Property owners with storefronts they need to fill receive funding to cover the cost of preparing the space for tenants and other property expenses, help with city permits and other support.
San Francisco launched the program in 2023 with $700,000 and contracted with SF New Deal, which focuses on supporting small businesses in the city.
The program is also supported by corporate philanthropy from Wells Fargo, JPMorgan Chase, Visa, Gap and others.
Among the first stores to open through the program was Devil’s Teeth Baking Co., a popular bakery in the Outer Sunset neighborhood that established an outpost in the moribund Financial District and brought followers with it.
“Suddenly, there are lines out the door on the weekend” of people waiting for breakfast sandwiches, Bertrang said.
The bakery now has a long-term lease, as do other graduates of the program, including Mello flower shop, arts-and-crafts studio Craftivity and Whack Donuts.
A pedestrian walks past shuttered stores on Broadway in Los Angeles.
(Etienne Laurent / For The Times)
San Francisco’s business centers were particularly hard-hit by the pandemic as its technology companies quickly adapted to remote work and kept at it even as the crisis eased, triggering widespread office and retail vacancies.
“San Francisco had the worst return-to-work situation in the nation,” Bertrang said. “It was the most extreme version of what L.A., New York and other cities in our country are dealing with.”
Representatives of nearly 40 organizations in cities across the country have reached out to him for advice on how similar programs might work in their stricken neighborhoods.
Among them was downtown L.A. business advocacy group Central City Assn., which has called for L.A. to subsidize retailers’ rents to help fill vacant storefronts in key corridors. It is working with city officials, looking into a program like Vacant to Vibrant for Los Angeles.
Adding businesses to the streets while improving public safety would help halt the “downward spiral and turn it into more of a virtuous cycle,” said Nella McOsker, president of the association.
“San Francisco has demonstrated this larger ripple effect of success,” she said. “This is really, really doable in targeted pockets of downtown,” she said.
Nick Griffin of the business improvement district DTLA Alliance said activating storefronts is a worthy goal as long as the city first makes the streets both safe and pleasant for pedestrians.
The city needs to provide clean sidewalks, street lighting and graffiti removal before consumers and businesses return, he said.
“San Francisco was the poster child for the doom loop and has pivoted to downtown recovery,” he said. “ We are building that story right now.”
Business
Warner Bros. nabs 11 Oscars, tying the record for most wins for a single studio
Warner Bros. tied the record for most wins for a studio in a single night with 11 Academy Awards on Sunday, a milestone that comes as the company faces an uncertain future.
The studio won six Academy Awards for “One Battle After Another” and four awards for “Sinners.”
Notable among the accolades was Michael B. Jordan’s Academy Award for lead actor for his dual roles as twins in “Sinners,” “One Battle After Another’s” win for best picture and Amy Madigan’s win for supporting actress in “Weapons.”
The record of 11 is jointly held by MGM for 1959’s “Ben-Hur,” Paramount for 1997’s “Titanic” and New Line Cinema with “The Lord of the Rings: The Return of the King” in 2003, before it was absorbed into Warner Bros.
Netflix was second with seven wins. Walt Disney Co., Apple, Universal-owned Focus Features and Neon all won one each.
The awards come at a precarious time for Warner Bros., which is set to be acquired by Paramount Skydance in a mega $111-billion deal for its entire parent company, Warner Bros. Discovery.
The film and TV studios, HBO and HBO Max were originally set to be acquired by Netflix before the streaming company dropped its bid last month after an aggressive pursuit by Paramount.
To buy the company, Paramount is taking on $79 billion in debt, a massive amount that many in Hollywood expect will result in steep layoffs targeting overlapping functions and departments across the two companies.
Paramount executives have already identified $6 billion in cost cuts, though they have said the majority of that will come from “nonlabor sources.” The company also said it does not plan to reduce production capacity, with Paramount Chief Executive David Ellison vowing to produce 30 films a year — 15 from each studio.
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