Open Markets Institute Joins Amicus Brief Defending California AI Transparency Law in Landmark Appeal
WASHINGTON, D.C. (July 24, 2026) – As debates about AI governance and transparency sweep across governments, the Open Markets Institute has joined an amicus brief urging the U.S. Court of Appeals for the Ninth Circuit to uphold California's law requiring AI companies to disclose information about the data used to train their models.
The case, X.AI LLC v. Bonta, represents one of the first federal appellate tests of whether states may require transparency from the companies building the world's most powerful generative AI systems. The brief asks the court to reject xAI's effort to block California's disclosure requirements, which mandate that developers of generative AI systems provide information about the data used to train their models.
The brief argues that governments have long been afforded substantial authority to require factual, noncontroversial disclosures about commercial products and services—particularly when those disclosures help consumers, researchers, and policymakers better understand technologies that increasingly shape public life.
"A handful of companies are rapidly becoming the gatekeepers of the AI era, yet they continue to insist the public should know as little as possible about the data that powers their business," said Karina Montoya of the Center for Media and Digital Governance at Open Markets. "Transparency is not censorship. It is a prerequisite for accountability, competition, and democratic oversight. If AI companies can invoke the First Amendment to shield basic facts about their products from public scrutiny, it will become significantly harder for policymakers and the public to govern these technologies in the public interest."
The amicus brief emphasizes that xAI has failed to demonstrate that California's law violates the First Amendment and urges the Ninth Circuit to affirm the district court's decision denying the company's request for a preliminary injunction.
California's law reflects a growing recognition that transparency is essential to effective AI governance. Basic disclosures about training data can help identify potential copyright concerns, bias, market concentration, and other risks associated with powerful generative AI systems.
The outcome of X.AI LLC v. Bonta could have implications far beyond California, influencing future efforts by states and Congress to establish transparency and accountability standards for artificial intelligence systems across the United States.
The amicus brief was authored by the AI Coalition of Data Integrity.
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For more on regulating AI in the public interest from the Open Markets Institute, Center for Media and Digital Governance at OMI, and the Open Markets Institute Europe, see:
“Who Do AI Agents Work For? Power and Control in the Next Internet”: A June 2026 report argues that policymakers will need to establish legal frameworks for AI agents to act in the interests of users rather than the corporations deploying them.
“No Bailouts for Big Tech Billionaires”: A May 2026 policy report urges policymakers to resist demands for government bailouts when the current speculative AI market bubble bursts.
“Same Gatekeepers, New Tollbooths”: An April 2026 report from CMDG maps the AI content market, proposing frameworks like collective licensing to guarantee fair compensation for news and creative content.
"Engineering the Cloud Commons: Tackling Monopoly Control of Critical Digital Infrastructure”: A report that examines and urges policymakers to break up Big Tech's control over cloud infrastructure, which fuels AI development (May 2025).
“Stopping Big Tech from Becoming Big AI”: A roadmap for using competition policy toward AI markets. Published in partnership with Mozilla (October 2024).
“AI in the Public Interest: Confronting the Monopoly Threat (November 2023), which centered two important debates: the promise and perils of generative AI, and of the harms of monopoly power in the digital age.
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