Resolution criteria

• Refers to California SB 53 (2025–26), the Transparency in Frontier Artificial Intelligence Act (AI transparency/safety), signed Sept 29, 2025. Verification: Governor’s announcement and enrolled text. (gov.ca.gov)

• Resolves YES if a U.S. federal statute is enacted and in effect that regulates frontier/AI model safety, transparency, or incident reporting in such a way as to supercede or preempt major provisions of SB 53. Verification: the enacted statute’s text on Congress.gov. Executive orders, agency rules, funding-conditional incentives without express preemption, or court decisions do not count. If such a statute is enacted but stayed nationwide as of the deadline, this resolves NO. (congress.gov)

• Otherwise resolves NO at the deadline. If SB 53 is repealed or materially altered before any qualifying federal preemption takes effect, resolves NO.

Background

• SB 53 requires large “frontier” AI developers to publish safety frameworks, report critical incidents to Cal OES, and includes whistleblower protections; violations can incur civil penalties. Signed into law 2025‑09‑29. (gov.ca.gov)

• A House-passed reconciliation bill in May 2025 included a 10‑year moratorium preempting state AI laws, but the Senate removed the provision on July 1, 2025; the final law signed July 4, 2025 did not include AI preemption. As of Oct 1, 2025 there is no federal statute preempting SB 53. (reuters.com) However, SB53 does contain a provision stating that it will not apply to the extent that it is preempted by federal law.[4]

Considerations

• “SB 53” is ambiguous across sessions: a different SB 53 (2023–24) concerned firearm storage and was signed in 2024; this market is about the 2025–26 AI bill. (gov.ca.gov)

• Traders should watch for any federal AI bill adding explicit state-law preemption; prior attempts were dropped, but new proposals could emerge. (natlawreview.com)