AI Actors, Real Penalties: New York’s First-in-the-Nation Advertising Law Is Now Live and Requires ‘Conspicuous Disclosures’

The Synthetic Performer Law took effect on June 9, making New York the first state to require businesses to label artificial intelligence (AI)-generated actors in commercial advertisements. Although New York is currently the only state to enact this type of AI transparency measure, it might not be for long. Similar legislation is currently pending in California, and we would not be surprised to see other states follow suit soon.

Read our previous alert here.

What the Law Requires

The core rule is straightforward. If you produce or create a visual or audiovisual commercial advertisement that contains a “synthetic performer,” you must “conspicuously” disclose the presence of the synthetic performer. The obligation applies in any medium, whether online, broadcast, social media, out-of-home, or otherwise. 

A few key details:

• Who is on the hook? The law’s disclosure obligation applies to anyone who “produces or creates” a covered ad, which could presumably include both the advertiser itself and third parties, such as ad agencies, involved in the ad’s development. Platforms and publishers that merely host or disseminate ads without involvement in their creation are expressly excluded from liability.

• What is a “synthetic performer”? The statute defines it as a “digitally created asset created, reproduced, or modified by computer, using generative artificial intelligence or a software algorithm, that is intended to create the impression that the asset is engaging in an audiovisual and/or visual performance of a human performer who is not recognizable as any identifiable natural performer.” 

In plain English: a “synthetic performer” is a rendering of a fictional human generated in whole or in part by AI or a software algorithm. The law does not apply to AI-generated “deepfakes” or other digital renderings of actual living people (though such uses may separately implicate the state’s publicity rights law). AI-generated products, backgrounds, and scenery are not in scope. 

• The “actual knowledge” standard. Liability is triggered only when the advertiser actually knows a synthetic performer was used in the ad. While this provides a limited liability exception where a third party (such as an ad agency) includes a synthetic performer without the advertiser’s knowledge, it will still behoove advertisers to avoid regulatory scrutiny altogether ensuring their ads are compliant. 

• Form of disclosure. A “conspicuous” disclosure is required. The statute does not prescribe exact wording or define “conspicuous,” and, to date, no compliance guidance has been issued by the state. Minimally, satisfying the law’s “conspicuous” standard requires the label to be reasonably visible and comprehensible, not buried in fine print or flashed briefly on the screen.

• Penalties and enforcement. $1,000 for a first violation and $5,000 for each subsequent violation. Enforcement rests with the New York Attorney General, and the statute creates no private right of action. 

• Scope. The statute lacks an express territoriality provision but, as a New York consumer-protection measure, should be assumed to reach any advertising viewable by New York consumers — regardless of where the ad was created or the advertiser is based. Because geofencing is sometimes impractical or not technically feasible in some cases, such as social media and certain types of digital advertising, the law could effectively operate as a national standard for certain categories of advertising. 

Key Exclusions

The law carves out three categories.

• Expressive work. Ads and promos for movies, TV shows, streaming content, documentaries, and video games that feature synthetic performers are exempt, provided the synthetic performer’s use in the ad is consistent with its use in the underlying work.

• Audio-only ads. Audio-only advertising is not subject to the law, which is limited to the presence of synthetic performers in visual and audiovisual advertising.

• Language translation. Where AI is used solely to translate a real performer’s speech, no disclosure is required.

Other States to Watch

New York is first, but it might not be alone for long.

California’s SB 1050 is advancing toward an Assembly floor vote after clearing committee in early July. Similar to New York, the bill would require a “clear and conspicuous” disclosure of synthetic performers. The current bill text includes no actual-knowledge requirement, adopting a less forgiving standard for liability. At the same time, it limits the disclosure requirements to ads that “prominently” feature a synthetic performer, a limitation not found in the New York law. Significantly, enforcement would run through California’s false advertising (Bus. & Prof. Code § 17500) and Unfair Competition (§ 17200) laws, opening the door to private litigation. 

As advertisers increasingly move to substitute or supplement human actors with synthetic performers, it would be unsurprising to see other states follow suit. In fact, commentators have reported that AI policy working groups in other states — including Illinois, Texas, and Washington — have discussed similar legislation. Given this trajectory, businesses could consider adopting synthetic performer disclosure as a standard practice now, positioning themselves for future compliance in additional states.

Key Takeaways for Advertisers

• Creative Review: Advertisers using AI-generated synthetic performers should evaluate whether existing ad-review processes address synthetic-performer content and related disclosure obligations.

• Vendor Contracts: When working with agencies and other vendors, consider addressing synthetic performer use through contractual provisions requiring disclosure and allocating responsibility for compliance.

• Disclosure Language: Consider conspicuous, format-appropriate labels across video, static, social, and programmatic placements.

• Plan for National Reach: California SB 1050 and future legislative activity may soon result in similar synthetic-performer disclosure requirements applicable beyond New York.