The Licensing Moat — Compliance Costs as a Competitive Weapon

The Veto I Printed and Then Could Not Put Away

Gavin Newsom returned Senate Bill 1047 without his signature on September 29, 2024. The bill's long name was the Safe and Secure Innovation for Frontier Artificial Intelligence Models Act. Scott Wiener carried it. It had passed the Assembly in August and the Senate at the end of that month. It would have asked developers of large models, and some of the people who rented them the compute, to put safeguards and policies in place against a class of harm the text called catastrophic. It would have stood up a Board of Frontier Models. A state board is a kitchen. Kitchens have chairs. Chairs have people.

I printed the veto message. I put it on the sideboard. Cosima moved it so she could set down the sticker bowl. She asked if the paper was a bill that had died. I said it was a bill that had been refused. She said refused is a story. I said a story that is a governor's letter is a fact. She said then why does it smell like a copier. I did not have an answer that was not a joke.

Newsom, at Dreamforce earlier that September, had talked about the outsized impact legislation like SB 1047 could have and the chilling effect, particularly in the open-source community. I cannot solve for everything, he said, in the Ars walk. What can we solve for? I am putting Dreamforce next to the veto so a grocery line cannot call the letter a surprise. A conference is a mouth. A veto is a letter. Two mouths can share a month.

Open source, in the rooms that opposed the bill, was the shop that would have been asked to wear a frontier costume for releasing weights. Sid does not release weights that cost $100 million to train. Sid still would have needed a paragraph about why not. Paragraphs are line items. I sat with him the week after the veto. He was not relieved. He was tired. Tired is honest. Relieved is a brochure.

The Board of Frontier Models, if the bill had lived, would have been a state entity overseeing development. I will not staff it in a novel. I will say a board is a kitchen, and that a kitchen has appointments, and that appointments are how a revolving door becomes a calendar invite.

Oz sells chalk in a box that still has a felt eraser. I bought a box I did not need because a threshold meeting still wants a board that is actually a board. He asked if I was teaching. I said I was dating a veto. He said vetoes are for governors. I said this veto is a letter. He dated the receipt. Felt is honest. Boards are a later weather.

I walked the fourteenth hole the Sunday after the veto and did not mention guardrails. A man I will call Pry, in a visor that had never met rain, asked whether California had "come to its senses." I said senses are a grocery word. He said then why the letter. I said letters are dates. He took a cart. I walked. The bunker I did not use was still a bunker.

Yates asked me to explain why a chilling effect is not a finding. I explained. He wrote Dreamforce / open source / not a finding and left it. He sliced a coupon that had used the word innovation in a font that wanted to be serious.

Newsom wrote that the bill magnified a conversation about threats. He wrote that the debate was whether the threshold should be the cost and the number of computations, or the system's actual risks. He wrote that by focusing only on the most expensive and large-scale models, the bill could give the public a false sense of security.

I am putting false sense of security next to likely outweigh costs so a grocery line cannot call the month a chorus. A governor can fear a false sense. A chief executive can say likely, then not certain. Two mouths. One September. Sid still needed a paragraph about why he was not covered. Paragraphs are line items. Line items are how a veto that talks about startups can still bill a startup for the explanation.

Cosima asked if a false sense was a stain. I said it was a letter. She said letters belong in a bowl. I said the bowl is for stickers. She put the veto message under the bowl anyway. The toner did what toner does. Smaller, specialized models, he said, might emerge as equally or more dangerous. He wrote that the bill did not ask whether a system was deployed in a high-risk environment, or involved critical decision-making, or used sensitive data. It applied stringent standards to even basic functions so long as a large system deployed them. He said he did not believe that was the best approach. I am not going to improve his sentences. I am going to say a veto can be a paragraph about a false sense of security and still leave the next lab free to ask for a different costume.

Wiener, after the veto, called it a setback for people who believe in oversight of massive corporations making decisions that affect safety and welfare. He also said the debate had advanced the issue on an international stage. Advancement is a mouth. A veto is a date.

The Assembly had passed SB 1047 on August 28, 2024, 48–16, in the legislative history I walked. The Senate had voted August 29, 30–9. I am putting the two counts next to the veto so a grocery line cannot call September 29 a surprise from a quiet bill. A bill can have two majorities and still die in a letter. Dying in a letter is a public. A public is not a finding that the majorities were imaginary.

I printed the history. Cosima asked if 48–16 was a score. I said it was a count. She said scores are for games. I said this count is a house. She put the printout under the bowl. The bowl is for stickers. Stickers are an afternoon. Counts are a later weather I will not freeze as a personality.

Yates wrote 48-16 / 30-9 / veto and refused a moral. He said majorities are how clients sleep. I said majorities are how museums keep a door. He dated the pad. The sunroom was the color of late paper. Late paper is this book's hour.

Sid asked whether "thirty to nine" meant the state had wanted the board. I said wanted is a grocery word. He said then why the letter. I said letters are governors. He paid for the coffee. The tray held. I did not take that as a sign.

What a Threshold Is, If You Have Only Met a Startup

The rooms that walked the bill put a training-cost line near $100 million and a fine-tune line near $10 million, plus a compute weather I will not freeze as if the text were still in force. A threshold is a costume. Below it, you are a shop. Above it, you are a frontier. Sid's suite does not train at $100 million. Sid's suite trains at a number that would not buy the pairings at my club. A Board of Frontier Models would not have needed Sid's chair. Sid would still have needed a counsel to explain why he did not need the chair. Counsel is a line item. Line items are how a veto that "protects startups" can still bill a startup for the explanation.

I sat in a threshold meeting, in a year that still had bagels, when a producer put a grid on a slide — covered, not covered, "depends." Someone from comms asked whether we should say responsible scaling. Someone from legal said we should say federal. We said federal. We did not say the shop.

After the meeting I walked to a convenience store that still sold a paper map and I bought a coffee I did not need. I sat on a curb that had a stain and I did the arithmetic people do when they realize the covered cells are the product. The landing page will show safety. The handbook will mention innovation. The shop will hire a person to write why it is not covered.

Cosima does not speak covered. Cosima speaks the Tuesday. The Tuesday is a lab she does not enter.

The Letters I Will Not Upgrade to a Chorus

Jason Kwon, OpenAI's chief strategy officer in that weather, wrote that federal regulation would be more appropriate than a patchwork of state laws.

Ars Technica, walking the veto week, put Kwon urging a veto in an open letter: federal cloth, not a state patchwork, progress slowed if California went first. I will keep open letter as a walk. I will not reprint the letter as a kit. I will say a chief strategy officer can ask a governor for a federal kitchen, and that a federal kitchen can share a dictionary with a June essay's understandable motivation, and that sharing is why Chapter 1 and Chapter 9 have the same noun.

Yates wrote Kwon / open letter / patchwork / veto week and boxed open. He said open is how clients sleep. I said open is how museums keep a door. He dated the pad.

Sid asked whether "open letter" meant he should have written one. I said writing is a line item. He said line items are why he has nine people. I said nine is a shop. He paid for the coffee. Patchwork is a word that means someone else's kitchen is inconvenient. Yann LeCun opposed. Ro Khanna, a Democrat in a district that knows a campus, opposed. Y Combinator opposed. Andreessen Horowitz opposed. Trade associations with names that sound like progress opposed. Elon Musk, in some walks, supported. Geoffrey Hinton and Yoshua Bengio, in other walks, supported. I am not going to pick a team. I am going to say a veto can be surrounded by letters that do not share a letterhead and still be one governor's paragraph.

Anthropic, after amendments, landed in a different chair. Amodei wrote that the new bill was substantially improved, to the point where benefits likely outweighed costs, and that he was not certain, and that some aspects still seemed concerning or ambiguous. Likely is a costume. Not certain is a second costume in the same paragraph. I printed both. Yates wrote likely / not certain and boxed it. He said a sentence that contains both is a comment, not a finding. I said a comment can still move a chair. He sliced a flyer.

I printed the Amodei letter again the week I printed Kwon. Two letters. One governor. One September. I put them on the sideboard, not under the bowl. Cosima moved them so she could set down the bowl. She asked if two letters were a fight. I said they were two chairs. She said chairs belong at a table. I said this table is a month. She peeled a sticker that had migrated onto likely. The adhesive left a ghost over not certain. She left both ghosts. Leaving both is a theology I will not improve.

Sid asked whether "not certain" meant he should have been certain. I said certain is a grocery word. He said then why the letter. I said letters are chairs. He paid for the coffee. The tray held. I did not take that as a sign.

Blaine asked whether "the good company" had "backed the bill." I said backed is a polo word. He said then why likely. I said likely is a costume. He took a cart. I walked a hole that had a shadow I did not enjoy.

On September 9, 2024, at least 113 current and former employees of OpenAI, Google DeepMind, Anthropic, Meta, and xAI signed a letter to Newsom in support of the bill.

I will not invent a signer. I will not typeset the letter. I will say September 9 can share a month with August 28 and August 29 and September 29, and that four dates are a seating chart, and that a seating chart can hold employees and a chief strategy officer in different chairs. Different chairs are honest. Choruses are a brochure.

Yates wrote Sept 9 / 113 / veto Sept 29 and refused a moral. He dated the pad. The sunroom was the color of late paper. Late paper is this book's hour. I did not ask him to enjoy it. Employees are not a lab's LD-2. Employees are a different kitchen. I will not invent their names. I will say 113 is a count, and that a count can share a month with a veto, and that sharing is why this chapter is not a cartoon about one company's mouth.

I will not invent the 113 names. I will not typeset a letter I have not held as a kit. I will say employees can share a month with a chief strategy officer and still be a different kitchen, and that a different kitchen is honest, and that honest is why I will not merge Kwon and the 113 into a chorus.

Jax sells twine that is not Gus's — thinner, for packages that still have a paper. I bought a length I did not need because a letter of 113 still wants a wrap I will not give it. He asked if I was mailing. I said I was dating a count. He said counts are for banks. I said this count is a letter. He dated the receipt. Thin is honest. Choruses are a later weather.

Google and Microsoft, in the walks that bother to separate them, proposed substantial amendments rather than a simple no. Amendment is a costume that still requires a lawyer. Sid does not have a lawyer who proposes substantial amendments to a state senate. Sid has a landlord's copier and a jammed tray.

The Meeting Called Frontier Hygiene

I sat, while I still had a badge, in a meeting whose title was frontier hygiene. The slide had a yellow light. I said we should not show a threshold we could not substantiate as a risk. Someone said the threshold was "how the conversation is happening." Conversation is another book's keynote in a smaller font. Legal said we should take the threshold offline. We shipped a sentence. I went to the garage.

Blaine, on a Tuesday I should have walked off, asked whether "the California thing" meant the industry had "dodged a bullet." I said a veto is a date. He said dates are for staff. I said staff is a comment. He took a cart. I walked the fourteenth hole and did not mention guardrails.

What I Will Not Sell You

I will not give you a bill you can refile. I will not give you a threshold checklist. I will tell you the veto happened, that the letters happened, that federal was the word a lab preferred when a state grew a board, and that a shop still pays for the explanation. The next room is a French share register. The veto is this one.

Cosima asked if a veto was a quilt. I said it was a letter. She said letters belong in a bowl. I said the bowl is for stickers.

Luce's Booth

Luce sits in a booth and sells a ticket that still has a time. I asked him if the 4:10 had been late all month. He said late is a pencil. I said hearings hate pencils. He said then hearings should take a bus. I bought a ticket I did not ride. The ticket had a time. I kept it next to Cal's stack. Receipts are this book's church.

A child asked Luce if the train had Wi-Fi. Luce said the train had a seat. Seats are honest. Wi-Fi is a landing page. I left by a door that had a closer that did not slam.

What Covered Would Have Cost

Covered, if anyone had asked in a threshold meeting, would have been a lawyer's afternoon and a grid. Nobody asked until a governor asked about a false sense of security. Security is Chapter 8's audit. This chapter is the veto. I will not invent the forty-seven uncovered shops. Inventing uncovered is a kit.

The Anniversary I Will Not Call a Sequel

September 29, 2025. One year to the day after the veto. Newsom signed Senate Bill 53, the Transparency in Frontier Artificial Intelligence Act. Scott Wiener again. Chapter 138, Statutes of 2025. Core obligations, in the rooms that walk an effective date, January 1, 2026. I am putting the anniversary in Chapter 1 so a grocery line cannot call the veto a disappearance. A veto is a date. A signature is a later date. Two dates can share a calendar and still be two bills.

The later bill, in the National Law Review walk, does not stand up a Board of Frontier Models. It asks large frontier developers to publish a Frontier AI Framework, to report critical safety incidents to the California Office of Emergency Services — fifteen days, or twenty-four hours if the risk is imminent — and to keep whistleblower protections. The Attorney General, in those walks, may seek civil penalties up to $1 million per violation. Catastrophic risk, in that walk's definition, is a foreseeable and material risk that development, storage, use, or deployment will materially contribute to the death of, or serious injury to, more than fifty people, or more than $1 billion in damage to property, from a single incident. I will not freeze fifty and a billion as a moral. I will say a definition is a costume, and that a costume can be narrower than a vetoed board, and that narrower is still a statute.

One walk put the heaviest duties above a half-billion dollars in revenue. I will keep that as a walk, not as a number I typeset for Sid. Sid does not have a half-billion. Sid still has a counsel question about whether he is large. Counsel questions are line items. Line items are how a narrower bill still bills a shop for the explanation.

By January 1, 2027, in that same walk, a consortium must deliver a report on the design and funding of CalCompute, a proposed state-operated public computing resource for researchers and startups. I will not freeze CalCompute as a kitchen that already has chairs. I will say a report date is a date, and that a public computer is a brochure until it has a room, and that a room is what Sid would actually use.

One walk put CalCompute at California Government Code section 11546.8. I will keep the citation as a walk. I will not staff the consortium. I will say a code section can share a January 1, 2027, report date, and that a report date can share a statute with a 15-day incident phone, and that sharing is why a narrower bill still has a kitchen Sid cannot sit in and a kitchen he might, someday, if a room appears, actually use.

Sid asked whether "public compute" meant he could stop paying the landlord's copier. I said copiers are not compute. He said then why the brochure. I said brochures are 2027. He paid for the coffee. The tray jammed. I did not take that as a metaphor.

Forbes Africa, walking 2025 lobbying, said OpenAI reportedly opposed SB 53 and Anthropic ultimately endorsed it. I will keep reportedly and ultimately as weathers. I will not invent the letters. I will say a year-later bill can split two labs that shared a Frontier Model Forum, and that splitting is a public, and that a public is not a finding that one lab is good.

The governor's office, on the signing day, said the law built on recommendations from a first-in-the-nation report he had convened, and that it helped the state boost innovation and protect public safety. Innovation and safety in the same sentence is a costume I have already walked. I will not improve the sentence. I will say a signing can share an anniversary with a veto and still be a different exhibit.

I printed the governor's release. Cosima asked if a year later was a birthday. I said it was an anniversary. She said anniversaries are for people. I said this anniversary is a chapter. She put a sticker on the release by accident. The adhesive left a ghost over the word trustworthy. Ghosts are honest. Releases erase them.

Yates wrote 1047 veto / 53 sign / same date different year and boxed it. He said calendars are how amateurs become novelists. I said I would not novelist. He sliced a coupon that had used the word guardrails.

Earl sells batteries in a drawer that still has a tester. I bought a nine-volt I did not need because a smoke alarm I do not love had started to chirp during a hearing. He asked if I was prepared. I said I was between two bills. He said batteries are between. I said two bills still need a nine-volt. He dated the receipt.

Wiener's later bill passed the Assembly on September 12, 2025, 59–7 in the history I walked, and the Senate concurred 29–8 the next day. I will not freeze the ayes as a personality. I will say a count can share a month with a signing, and that a signing can share an anniversary with a veto, and that three dates are a seating chart.

The 2024 bill had asked for kill switches and a board. The 2025 bill asked for a framework and a phone number at Emergency Services. I am not going to call the second a surrender. I am going to say a narrower statute can still be a statute, and that a shop still pays for the paragraph that says it is not large, and that large is a costume a half-billion walk can wear.

The 15-day incident report and the 24-hour imminent-risk report, in the National Law Review walk, go to the California Office of Emergency Services. Emergency Services is a kitchen that is not a Board of Frontier Models. I will not invent the form. I will say a phone number at Emergency Services is a public, and that a public can share an anniversary with a veto, and that sharing is why this chapter has two bills and one date.

Whistleblower protections, in that walk, sit in the later statute. I will not typeset a whistleblower kit. I will say a protection is a chair, and that a chair can share a bill with a $1 million civil penalty, and that a penalty is a public I will not freeze as a case I have held.

I sat, while I still had a badge, in a meeting whose title was incident hygiene. Someone said we should "be ready to call Sacramento." I said we should not be ready with a number we had not filed. Legal said we should take ready offline. We shipped a sentence about transparency. Transparency is a brochure that shares a noun with a June essay.

Sid asked whether Emergency Services would call him if his model jammed. I said jammed is a copier. He said then why the statute. I said statutes are for large. He said large is a counsel's afternoon. I said afternoons are line items. He paid for the coffee.

Shea sells soup from a window that still has a specials board. I bought a cup I did not need because two bills are a dry thing and a mouth still wants salt. She asked if I wanted crackers. I said I wanted a price. She said prices are on the board. I said boards are honest. She dated the receipt. Soup is honest. Ayes are a later weather.

Yates asked me to explain why a veto is not a finding that the industry is safe. I explained. He wrote veto ≠ blessing and left it. I am leaving it too. Inequalities are a habit I am trying to quit. The pad already has the habit. I will not decorate it.