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AI Law Wiki News for August 27, 2026

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August 27, 2026 — U.S. District Judge Rita F. Lin ruled for Anthropic in its challenge to the Pentagon’s supply-chain risk designation, finding that the government’s broad measures violated the First Amendment and due process.[1][2] New Jersey Governor Mikie Sherrill signed S3379/A4096, requiring data centers to disclose energy and water use twice each year.[3][4] Sherrill also signed A5165/S4390, ending $250 million in state tax-credit incentives earmarked for large artificial-intelligence data centers.[5][6] California Governor Gavin Newsom signed SB 928, requiring California State University instructors of record and faculty employees to be people who meet applicable trustee rules while preserving employees’ ability to use AI tools for university operations and student services.[7][8]

Contents

  1. Federal judge rules Pentagon’s Anthropic blacklist illegal
  2. New Jersey enacts data-center energy and water reporting
  3. New Jersey ends AI data-center tax credits
  4. California enacts human-instructor requirement for Cal State

Federal judge rules Pentagon’s Anthropic blacklist illegal

Judge Lin ruled that the Pentagon retaliated against Anthropic for constitutionally protected criticism of the government’s position on AI use and that the challenged measures violated the Fifth Amendment’s Due Process Clause.[2] The 59-page ruling said the measures were “illegal and baseless” because the evidence did not establish that Anthropic would sabotage its model.[2]

The dispute arose after Anthropic refused to permit Claude to be used for fully autonomous lethal weapons or mass surveillance of Americans, while the Pentagon sought authority to use the model for all lawful purposes.[1][2] Anthropic filed the Northern District of California action in March 2026, alleging unlawful retaliation after the government labeled the company a supply-chain risk.[1] A separate, narrower challenge concerning another supply-chain rule remains pending in the D.C. Circuit.[1]

See case page: Anthropic PBC v. U.S. Department of War

New Jersey enacts data-center energy and water reporting

Governor Sherrill signed S3379/A4096 on August 27, requiring New Jersey data-center owners and operators to file reports twice a year with the Board of Public Utilities.[3][4] The reports must disclose total energy use, energy used for cooling and information-technology equipment, peak daily water use and water sources, and details about onsite and backup power supplies.[3][9]

Sherrill also announced Department of Community Affairs guidance intended to help municipalities negotiate community-benefits agreements with data-center developers.[3] The guidance, distributed through an August 25 Local Finance Notice, addresses local infrastructure and emergency-response effects, potential community investments, and state labor standards.[3]

New Jersey ends AI data-center tax credits

Governor Sherrill signed the End Data Center Tax Credits Act, A5165/S4390, on August 27, ending $250 million in tax-credit incentives earmarked for large AI data centers in New Jersey.[5][6] The bill passed both legislative chambers with nearly unanimous bipartisan support.[5]

California enacts human-instructor requirement for Cal State

Newsom approved SB 928 on August 27, and the Secretary of State chaptered it the same day as Chapter 149 of the Statutes of 2026.[7] The law requires each CSU instructor of record and faculty employee to be a person who meets the trustees’ applicable faculty rules; covered faculty positions include professors, lecturers, librarians, counselors, and coaches.[8]

The statute expressly allows CSU employees to continue using AI tools to assist university operations or provide services to students.[8] The measure followed faculty-union concerns that CSU’s expanding use of generative AI could displace bargaining-unit work, although CalMatters reported few concrete examples of attempted faculty replacement.[10]

References

  1. ↑ 1.0 1.1 1.2 1.3 Associated Press, “Judge rules in favor of Anthropic in case against Pentagon,” August 28, 2026
  2. ↑ 2.0 2.1 2.2 2.3 The Hill, “Judge rules Pentagon’s supply chain risk designation for Anthropic was illegal,” August 27, 2026
  3. ↑ 3.0 3.1 3.2 3.3 3.4 WRNJ Radio, “Gov. Sherrill signs data center transparency bill, announces new guidance for N.J. municipalities,” August 28, 2026
  4. ↑ 4.0 4.1 New Jersey Legislature, “S3379,” 2026 legislative session
  5. ↑ 5.0 5.1 5.2 New Jersey Legislative Assembly Democrats, “Bipartisan Bill Ending Tax Breaks for Large AI Data Centers Becomes Law,” August 28, 2026
  6. ↑ 6.0 6.1 New Jersey Legislature, “A5165,” 2026–2027 legislative session
  7. ↑ 7.0 7.1 California Legislative Information, “SB 928 Bill Status,” showing approval and chaptering on August 27, 2026
  8. ↑ 8.0 8.1 8.2 California Legislative Information, “SB 928 Chaptered Bill Text,” August 27, 2026
  9. ↑ New Jersey Monitor via Yahoo News, “Data centers must report water, energy use under new law signed by Gov. Sherrill,” August 27, 2026
  10. ↑ CalMatters, “Cal State faculty push to prevent AI tools from replacing them as schools and staff experiment,” June 19, 2026
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