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P E E R T O P E E R M A G A Z I N E · W I N T E R 2 0 2 5 15 So, what does that really mean? And what is the real impact on the ever-growing landscape of artificial intelligence? WHY SB 53 MATTERS NOW AI systems – especially large "foundation" models – have become exponentially more capable in the last few years. From generating human-level text to assisting with scientific research to powering autonomous systems, frontier-AI models carry both extraordinary promise and equally extraordinary risk. California's lawmakers recognized a gap: the companies building the most powerful models were doing so without a standardized, legally enforced safety or transparency framework. Given that an overwhelming percentage of these companies' headquarters are in California, the state saw both opportunity and responsibility. SB 53 specifically addresses "catastrophic risks", the kind of dangers that could arise from misaligned or misused frontier AI. While these risks are low-probability, their potential consequences – massive economic disruption, security incidents, or failures of critical systems – are high enough to merit careful attention. The result is a law that reflects California's "Silicon-Surf ethos": innovation should flow freely like a Pacific wave, but surfers still follow safety flags. A BROAD OVERVIEW OF SB 53 SB 53 applies to large AI developers that meet specific revenue and computational thresholds – essentially, the giants of the field. These are the companies whose models require supercomputing resources and whose innovations could influence global markets. At its core, the law requires two things: 1. Transparency around how advanced models are developed and governed; and 2. Accountability through reporting obligations, safety disclosures, and whistleblower protections. SB 53 does not tell companies which models to build, what data to use, or how their algorithms must function. Instead, it insists that companies take responsibility for understanding the risks of their creations – and share those insights with the public. Under SB 53, companies must publish an annual Frontier Model Safety Framework, a public-facing document explaining how they evaluate risks, what safety protocols they follow, and how they incorporate industry best practices. It is not a mandate to reveal internal secrets; developers do not have to share their code or proprietary data. Instead, it is a

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