This week, governments turned up the heat on AI and Big Tech as holding companies doubled down on artificial intelligence to stay ahead. In today’s MadTech Daily, we discuss the ad industry unveiling the new AdCP standard for agentic AI, major publishers facing a wave of patent lawsuits, and Walmart teaming up with OpenAI for AI-first retail.

California has taken the lead on AI regulation, with Governor Gavin Newsom signing SB 243 into law, the first in the US to mandate safety protocols for AI companion chatbots. The legislation puts platforms like Meta, OpenAI, Character AI, and Replika on notice, holding them legally accountable for failing to meet new standards designed to protect children and vulnerable users.

Shifting from policy to business innovation, WPP is going all in on AI. The holding company has inked a USD$400m (£296m), five-year strategic partnership with Google, the first major move under new CEO Cindy Rose. The deal will embed Gemini and Veo into WPP’s creative and media platforms, supercharging WPP Open to deliver hyper-personalised, real-time campaigns.

But while Google deepens ties with advertisers, it’s under growing pressure in Europe. The tech giant has offered a new round of search concessions to EU regulators to avoid a looming Digital Markets Act fine, pledging changes to how rival services appear in search results.

That regulatory scrutiny isn’t limited to search. The European Commission has turned up the heat on Snapchat, YouTube, the Apple App Store, and Google Play, demanding details on how they protect minors from harmful content and illegal products under the Digital Services Act. At the same time, TikTok faces backlash in the UK after announcing plans to cut 439 content moderation jobs in London, prompting calls from MPs and unions for a formal inquiry.

In the UK, the Competition and Markets Authority has officially designated Google with strategic market status in search and search advertising, a landmark ruling giving the regulator sweeping powers to impose pro-competition measures across the sector.

Reddit is also strengthening its Madison Avenue ties, hiring Sharb Farjami, former CEO of WPP Media North America, to lead its agency partnerships as the platform sharpens its focus on advertising growth.