Microsoft has revamped its AI-powered Recall feature, shifting from automatic to opt-in use with enhanced security measures like full encryption and Windows Hello authentication, addressing privacy concerns. California Governor Gavin Newsom vetoed SB-1047, which aimed to regulate AI models, citing concerns that smaller models outside the regulation's scope might pose greater risks. Meanwhile, OpenAI is facing a leadership shakeup as CTO Mira Murati and other key executives depart, coinciding with a shift in the company's focus toward a more traditional startup model under Sam Altman's leadership. This and more on the Gestalt IT Rundown.