Countdown to California’s TFAIA: Is Your Company Ready? 

The TFAIA applies to companies that train, retain, or materially modify large-scale foundation models, as well as those that make such systems accessible to Californians. It targets “frontier developers” using massive computational resources—defined as training runs exceeding 10²⁶ floating point operations—and large organizations with more than $500 million in annual revenue involved in the creation or deployment of these powerful models. 

This regulation applies to any company that uses an AI model that is derived from another model that was originally trained using more than 10²⁶ floating-point operations (FLOPs) and has been materially modified.  applies to a few select companies, it will become a segway to more AI regulations in the future for many other companies.  While this only applies to a few select companies, it englobes many companies indirectly and will become a segway to more AI regulations in the future for many other companies. The TFAIA marks the start of many new state regulations in the U.S., with Colorado already implicating similar AI regulations.

Under the law, covered entities must publish a Frontier AI Framework outlining their governance, risk mitigation, and security practices. They will also be required to file transparency reports for each model release or major update, report any Critical Safety Incidents to California’s Office of Emergency Services within 15 days, and protect whistleblowers through clear, retaliation-free reporting channels. Model weights and other sensitive assets must be secured to prevent misuse or unauthorized access.  

Noncompliance can result in penalties of up to $1 million per violation, with no explicit cap in the law on how many separate violations can be found and penalized.  

With the law taking effect in about two months, organizations are now racing against the clock. Achieving compliance is not a matter of simply checking regulatory boxes—it will require the establishment of new governance frameworks, transparency pipelines, and strong collaboration across AI, legal, risk, and security teams. 

Beyond meeting regulatory expectations, early compliance offers a strategic advantage. Demonstrating readiness signals to investors, regulators, and customers that your organization represents AI trust, resilience, and responsibility. As other jurisdictions look to California as a model, TFAIA compliance may soon become the baseline for operating in a global AI market defined by transparency and accountability. It should also become a part of companies’ AI Governance strategy, in line with other guidelines. 

Sia’s TFAIA Readiness & Compliance Framework equips organizations with the strategies, tools, and expertise needed to meet emerging requirements confidently and efficiently. Our approach begins with a readiness assessment to determine whether your company qualifies under the Act and to identify any compliance gaps. From there, we help design and implement a comprehensive governance framework that integrates risk assessment, security controls, third-party evaluations, and oversight mechanisms aligned with leading standards such as the NIST AI Risk Management Framework and ISO 42001.  

We also assist in building the infrastructure for transparency and incident reporting, ensuring organizations have reliable processes for publishing required reports, managing safety incidents, and maintaining whistleblower protections. Our advisory services extend beyond the organization to include vendor governance, embedding TFAIA-aligned policies and monitoring throughout your AI ecosystem.  

Finally, Sia provides strategic monitoring and regulatory intelligence, helping clients stay informed as the global AI policy landscape evolves. We integrate our AI capabillities to speed up compliance processes with tools such as RegMatcher. 

RegMatcher uses advanced large language models (LLMs) to automate the complex task of mapping internal policies to evolving regulatory requirements. It analyses and identifies compliance with new regulatory requirements against your internal policies and controls. RegMatcher aligns regulations with internal policies controls, performing gap analysis to identify discrepancies and ensure policies are optimized for compliance. It also allows you to verify the compliance of your control evidence against control design and validates control evidence audit responses.