California Gov. Gavin Newsom on Sunday vetoed a hotly contested artificial intelligence safety bill after the tech industry raised objections, saying it could drive AI companies from the state and hinder innovation.

Newsom said the bill "does not take into account whether an AI system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data" and would apply "stringent standards to even the most basic functions — so long as a large system deploys it."

Newsom said he had asked leading experts on generative AI to help California "develop workable guardrails" that focus "on developing an empirical, science-based trajectory analysis." He also ordered state agencies to expand their assessment of the risks from potential catastrophic events tied to AI use.