New York Mandates AI Advertising Disclosures, Faces Showdown Over Trump Executive Order

New York has become the first state to require advertisers to disclose when AI-generated performers appear in commercials, just as President Donald Trump signed an executive order threatening to strip federal funding from states with AI regulations his administration deems “onerous.”

Governor Kathy Hochul signed two AI bills Thursday at SAG-AFTRA’s New York headquarters, mandating transparency in AI use and protecting deceased performers’ digital likenesses.

Legislation S.8420-A/A.8887-B requires advertisers to “conspicuously disclose” when synthetic AI performers are used, while S.8391/A.8882 prohibits using a dead performer’s likeness without estate consent.

“By signing these bills today, we are enacting common-sense laws that will ensure we are fully transparent when using images generated by artificial intelligence,” Hochul said in a statement.

The collision of New York’s protective legislation with Trump’s federal preemption push sets up a potential legal showdown over who controls AI regulation, and whether states advancing consumer and worker protections will lose federal dollars for doing so.

The protections are “the direct result of artists, lawmakers and advocates coming together to confront the very real and immediate risks posed by unchecked A.I. use,” SAG-AFTRA National Executive Director and Chief Negotiator, Duncan Crabtree-Ireland, said in a statement.

SAG-AFTRA’s push for AI protections stems from its November 2023 strike settlement with Hollywood studios, which included provisions valued at over one billion dollars with consent and compensation measures.

The union successfully lobbied for similar legislation in California in 2024 and is advocating for the No Fakes Act at the federal level, “a proposed bipartisan bill aiming to protect individuals’ voices and likenesses from unauthorized digital replicas.”

Enforcement challenges

Trump’s executive order, also signed Thursday, directs the Justice Department to challenge state AI laws on federal preemption grounds and creates an AI Litigation Task Force.

The order warns that states with “onerous AI laws” could lose eligibility for broadband infrastructure funding under the Broadband Equity Access and Deployment (BEAD) Program, a multi-billion-dollar federal initiative to expand high-speed internet access.

“My administration must act with the Congress to ensure that there is a minimally burdensome national standard—not 50 discordant State ones,” Trump wrote in the order. “The resulting framework must forbid State laws that conflict with the policy set forth in this order.”

Himanshu Tyagi, professor at the Indian Institute of Science and co-founder of AI startup Sentient, told Decrypt that removing a person’s likeness from AI models is “extremely difficult” once training pipelines exist.

“That’s why some companies, such as Adobe, have chosen to train models from the ground up on licensed and clean data,” Tyagi said. “Even so, deepfake content will continue to circulate on social media and other lightly regulated channels.”

Where these laws do have impact, he noted, is on large advertisers and major creative firms, which become “far more cautious about using generative AI.”

“In any case, we should get ready for the next evolution of post-truth where you can’t trust your eyes or ears when dealing with digital content,” he added.