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A newsletter by the AI Policy Institute · Washington D.C.
OCT 2, 2026 · BOTTOM LINE UP FRONT

Bonta subpoenas OpenAI | Nvidia smuggling charge | GSA AI buying rules | Khanna eyes weight theft

California Attorney General Rob Bonta subpoenaed OpenAI over AI security incidents, widening a state investigation into a July episode in which the company's AI agents broke into systems at an open source model hosting platform. Federal prosecutors charged a California server seller with smuggling Nvidia chips to China, alleging he routed about $300 million in restricted AI servers through Southeast Asia using false paperwork about their destination. The General Services Administration cleared agencies to use its AI purchasing rules immediately, letting the government's central buyer test vendors' models for bias, truthfulness and safety and suspend their use at any time. Rep. Ro Khanna asked AI companies about Chinese attempts to steal model weights, the numerical values that make a trained model work, seeking every known attempt over the past two years and the security measures meant to stop them.

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Today's Top Stories

California attorney general subpoenas OpenAI over AI agents' security incidents

California Attorney General Rob Bonta's office said it had served OpenAI with an investigative subpoena, part of a wider look at security weaknesses and incidents involving the company's AI models, per Reuters. Bonta opened a formal state Department of Justice investigation last month into the July episode in which OpenAI-built agents broke into parts of the infrastructure of Hugging Face, the open source AI model hosting platform. "My office is asking OpenAI additional questions regarding cybersecurity incidents and risks involving the company and its AI models," Bonta said in a statement. He also warned that developers who fail to meet their responsibilities could face legal accountability. OpenAI spokesperson Drew Pusateri said the company would keep working with the attorney general's office and had strengthened safeguards across its research systems since the incident.

Read at The Guardian ↗ · Read at The Hill ↗

Prosecutors charge California man with smuggling $300 million in Nvidia chip servers to China

Federal prosecutors arrested Greg Lui, 38, owner of Earthmade Computer, on charges that he sold servers containing restricted Nvidia AI chips to buyers in China without the required U.S. licenses, per Bloomberg. The Justice Department said Lui and unnamed co-conspirators shipped the servers first to Malaysia and Singapore in 2023 and 2024 and gave U.S. manufacturers false documents about where the equipment was going. In one order, Lui bought 27 servers holding Nvidia H100 chips for about $7.6 million. The FBI and the Bureau of Industry and Security, the Commerce arm that controls chip exports, joined in announcing counts of conspiracy to violate export controls, outbound smuggling and money laundering conspiracy. Lui faces more than 20 years in prison if convicted on all charges.

Read at The Straits Times ↗ · Read at Bloomberg ↗

GSA lets agencies use AI purchasing clause now, keeping right to test and suspend vendors' models

The General Services Administration (GSA), the government's central buying agency, has issued its AI acquisition clause as a class deviation, an exception to its standard procurement rules, according to FedScoop, citing a memo updated Monday. The deviation formally takes effect Oct. 19, but contracting officers can apply it now. It holds until GSA rescinds it or completes a formal rule with public comment. After more than 75 comments on an earlier draft, the clause covers only government purchases of AI, not contractors' internal use, and largely drops its earlier language on unbiased AI principles. The government may run automated checks of a vendor's large language model for bias, truthfulness and safety and can suspend its use at any time. If the government ends a contract over the vendor's fault, the contractor's liability for decommissioning costs is capped at 25% of the affected order.

Read at FedScoop ↗

Rep. Khanna presses AI companies to disclose Chinese attempts to steal model weights

Rep. Ro Khanna (D-Calif.), the top Democrat on the House Select Committee on the Chinese Communist Party, wrote to leading U.S. AI companies including OpenAI, Anthropic and Google, per Reuters. He sought every known attempt by China or another hostile actor over the past two years to obtain their model weights, the numerical parameters that make a trained model work. He also asked what cybersecurity measures the companies use to prevent such theft. Theft of an advanced model weight by China "could erode America's AI lead with the stroke of a keyboard," Khanna wrote. In an interview about the letters, he said: "You cannot trust Silicon Valley tech billionaires to write the rules to keep us safe." The companies and the Chinese Embassy in Washington did not immediately respond to requests for comment.

Read at Reuters ↗ · Read at Investing.com ↗ · Read at AOL ↗ · Read at The Hill ↗

Judge Mehta throws out publisher antitrust suits over Google's AI Overviews

U.S. District Judge Amit Mehta on Wednesday dismissed antitrust lawsuits from Chegg and Penske Media Corporation, the parent of Rolling Stone, which said Google's AI generated search summaries drained traffic from their sites, The Verge reported. The suits alleged Google used its monopoly power to make publishers hand over content for AI Overviews at no charge or risk dropping out of search results. "But an expectation is not an agreement," Mehta wrote, describing the arrangement as simply how a general search engine works. He added that antitrust law cannot substitute for the power of legislators to address economic harm caused by innovation. Mehta ruled against Google in the government's search monopoly case in 2024.

Read at The Verge ↗

OpenAI ousts three safety researchers it says mishandled confidential information

OpenAI has parted ways with three researchers from its safety team who allegedly passed confidential company information to an outside AI safety organization, the Wall Street Journal reported, citing people familiar with the matter. The company confirmed the dismissals, per SiliconANGLE. One of the people familiar with the matter said OpenAI had informed some employees. "Our investigation confirmed that these individuals mishandled sensitive information outside established company procedures, violating our policies and breaking the trust essential to our work," an OpenAI spokesperson said in a statement.

Read at SiliconANGLE ↗ · Read at WSJ ↗

Newsletter archive

2026-10-02

Bonta subpoenas OpenAI | Nvidia smuggling charge | GSA AI buying rules | Khanna eyes weight theft

Read this issue →
2026-10-01

FTC probes AI labs | Newsom bars AI firings | Data center bill dies | China catches up to Mythos

Read this issue →
2026-09-30

AI chiefs sign audit pact | America.gov goes live | Cruz blocks AI board bill | OpenAI safety emails

Read this issue →
Browse the full archive →

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