New York to fine brands $5,000 for putting AI-generated people in ads without disclosure

Any advertisements in New York that feature artificial intelligence-generated people in place of actors will now be violating state law if they don't clearly label that they have used a "synthetic performer."

The law, signed in December by Gov. Kathy Hochul, went into effect Tuesday. Her office is calling it a "first-in-the-nation law" that will boost transparency at a time when it says AI-generated performers are popping up across all forms of media, including on social platforms and in digital advertising.

Synthetic performers are defined under state law as "digitally-created media that appear as a real person." The law applies to ads in any medium.

"In New York, we are setting the rules of the road instead of letting AI run the show," Hochul, a Democrat, said in a statement. The "simple, honest disclosure" required by the law "protects consumers, respects our creative workforce and keeps New York at the forefront of responsible innovation," she said.

Ads that don't "conspicuously disclose" that they have used a synthetic performer will be subject to a penalty of $1,000 for a first violation and $5,000 for any further violations.

There are specific carve-outs listed in the law to exempt ads for movies, television shows, streaming content, video games and other works that feature synthetic performers in the entire work. It also doesn't apply to audio advertisements or ads where AI is solely used for language translation.

When the law was making its way through the state legislature last year, the American Association of Advertising Agencies and several other advertising organisations issued statements in strong opposition to the law.

The 4As, as the organisation is better known, said in one blog post that it would hurt advertisers by "injecting compliance uncertainty into the advertising process, burdening brands (and their agencies) who advertise in New York and undermining creative and technological innovation."

Other organisations, like the New York State Broadcasters Association, said in public statements during the legislation's journey to become law that they were relieved to see some of those carve-outs that were created through amendments, but remained concerned about the broad definition of a synthetic performer. David Donovan, the president of the organisation, said in a statement to The Associated Press on Tuesday that local broadcast stations are ready to comply with the law.

The biggest supporter of the law was SAG-AFTRA, the actors' union that recently ratified a new contract with studios and streamers that they say provides further protections against synthetic performers.

The law is one of many proposed or enacted in several US states with the goal of boosting job security for real humans or curbing the potential privacy and safety risks posed by AI. The existing state laws that have been passed include barring deepfakes in specific instances, limiting the collection of certain personal information and requiring more transparency from companies.

Just after Hochul signed the synthetic performers law in December, President Donald Trump signed an executive order pressuring states not to regulate AI. The move came out of fear that the patchwork of regulations across the states could impede AI companies' growth and allow China to catch up to the US in the AI race. Critics of the executive order argue it will allow tech companies to operate with little to no oversight.