UPDATE – MARCH 2026:
California’s GenAI guidelines, released under Governor Gavin Newsom’s Executive Order N-12-23, remain in effect and continue to guide state agencies in the responsible procurement and use of generative AI. These guidelines are currently undergoing refinements based on feedback from stakeholders and results from pilot programs.
ORIGINAL NEWS STORY:
California Releases GenAI Guidelines to Govern Procurement and Deployment
In alignment with Executive Order N-12-23, officials unveiled the GenAI Guidelines for Public Sector Procurement Uses and Training. These policies provide structured direction for procuring, utilizing, and training on generative AI within state government. Their central focus is ensuring that any AI integration is responsible, ethical, transparent, and trustworthy. State agencies are expected to evaluate how generative AI can support their specific missions while managing potential risks and operational challenges.
What the Guidelines Cover
The framework defines generative AI as pretrained models capable of producing synthetic content—including text, images, and code—based on user prompts.
The guidelines distinguish between two procurement categories:
- Incidental purchases, where generative AI is a feature within a broader software tool
- Intentional purchases, where generative AI is the primary product being procured
Example use cases include content generation, chatbot deployment, and data analysis support.
Training and Oversight Requirements
Each state agency must designate an executive lead—typically the Chief Information Officer (CIO)—to oversee monitoring, evaluation, and governance of generative AI deployments.
Training is required for executives, procurement professionals, and staff across departments.
Key training areas include:
- Identifying appropriate business needs for AI
- Conducting risk assessments
- Preparing and validating datasets and models
- Evaluating generative AI performance over time
California has also created a statewide AI training roadmap tailored to different roles. Procurement officials receive structured onboarding, while staff are encouraged to participate in a statewide AI community of practice.
Risk Management and Procurement Procedures
The guidelines emphasize risk management aligned with the NIST AI Risk Management Framework. Agency CIOs are responsible for ensuring proper assessments occur before deploying generative AI systems.
Procurement requirements include:
- Disclosure language for generative AI included in all solicitations
- Completion of a disclosure fact sheet by vendors
- Mandatory CIO evaluation of AI-related procurements
- Post-contract reporting for generative AI projects
- Oversight by designated generative AI specialists
Conclusion
California’s guidelines offer a clear roadmap for responsible AI adoption. They encourage agencies to start with risk assessments and soft launch initiatives before fully implementing generative AI tools. To support this effort, the state has provided toolkits, process maps, and sample contract language.
Need Help?
Also, with every day comes a new AI regulation or bill, and you might have questions and concerns about how it will impact you. Therefore, don’t hesitate to reach out to BABL AI. Hence, their Audit Experts are ready to provide valuable assistance.
