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California is moving forward with efforts to integrate Generative AI (GenAI) into key state operations, focusing on housing, employment, and budget management. The initiative follows Governor Gavin Newsom’s executive order promoting the responsible use of AI in state government.
The state is launching three projects in collaboration with AI innovators, with a formal procurement process now underway. Companies such as Esri, Microsoft, OpenAI, Google, and My Town AI have presented potential solutions to state officials, building on insights gained during the first large-scale GenAI Innovator Showcase held in September.
“California must continue to innovate when transformative technology like GenAI can be used right now to help address challenges we face across state government,” Governor Newsom said.
The initiative aims to streamline state services, reduce administrative burdens, and improve decision-making in critical areas.
The Department of Housing and Community Development (HCD), part of the Business, Consumer Services and Housing Agency, plans to use GenAI to improve tracking and transparency in housing projects and local development plans. The goal is to streamline reporting processes, increase efficiency, and ensure equitable access to housing.
“We need to utilize all the tools at our disposal to improve the lives of all Californians,” said Tomiquia Moss, Secretary of the Business, Consumer Services and Housing Agency.
The Employment Development Department (EDD) and the State Labor and Workforce Development Agency (LWDA) aim to harness GenAI to improve workforce planning and recession forecasting. By refining statistical models, the state hopes to produce real-time data on employment trends, enabling faster responses to economic downturns and better-targeted workforce training programs.
Labor and Workforce Development Agency Secretary Stewart Knox emphasized the value of using AI to prepare for economic shifts, stating, “AI is a potentially powerful tool for honing our ability to predict when our fellow residents will need economic assistance.”
The Department of Finance (DOF) is seeking to automate its analysis of legislative bills, a process that currently involves sorting through multiple data sources to assess fiscal impacts. By integrating AI, the department hopes to produce comprehensive summaries and improve efficiency in state budget reviews.
Joe Stephenshaw, Director of Finance, said the department looks forward to “streamlining our workload, improving decision-making, and ensuring responsible allocation of California’s financial resources.”
AI innovators have six weeks to submit proposals for testing in a secure environment as part of the Request for Innovative Ideas (RFI2) process. The state will pay selected vendors $1 to test their solutions, with the goal of learning from the technology before committing to larger-scale implementation.
The GenAI initiative is part of California’s broader effort to maintain its global leadership in AI development. Home to 32 of the world’s 50 leading GenAI companies, California is positioning itself as a hub for AI innovation and policy development.
The state has also taken steps to regulate AI’s societal impact. Recent legislation addresses the use of AI-generated deepfakes, requires AI watermarking, and protects digital likenesses of performers.
Governor Newsom’s executive order outlines the need for transparency, accountability, and ethical AI use in state operations. The state’s partnership with NVIDIA and its hosting of a GenAI summit highlight California’s effort to shape global AI standards.
