AI Legal Updates: Synthetic Performer Transparency; State + Federal Conflict

On December 11, 2025, artificial intelligence regulation shifted dramatically with two major legal developments. New York Gov. Kathy Hochul signed into law two bills requiring advertisers to disclose their use of synthetic performers in commercials. Hours later, the White House issued a sweeping Executive Order seeking to halt all state-level AI regulation in favor of a yet-to-be-determined federal standard.

New York: Disclosure Requirement for Synthetic Performers

On December 11, Gov. Hochul signed state legislative bills S.8420-A/A.8887-B into law. These bills, passed during the summer by the New York legislature, will amend New York’s General Business Law § 396 b to require explicit disclosure when AI-generated “synthetic performers” are used in advertisements and will take effect in June 2026.

A synthetic performer is a digital asset created with generative AI that looks like a human performing but does not represent any identifiable natural person.

The new legislation was strongly supported by the SAG-AFTRA talent union, which has been adopting new requirements of its own to protect professional performers from being passed over in favor of AI-generated synthetic performers or unfairly replicated using generative AI technologies. The most recently issued SAG-AFTRA Commercials Contract, collectively bargained with the Joint Policy Committee representing advertisers and agencies, discourages advertisers from using synthetic performers in commercials when the primary purpose for doing so is to save on talent costs. However, as video-generating AI applications, including OpenAI’s Sora, have become more popular, concerns have been raised that such tools would start to be used by advertisers in place of hiring actual performers.

Who is Impacted?

New York’s synthetic performer disclosure law applies to entities that produce or create advertisements featuring synthetic performers – such as advertisers and their agencies. Under this new law, advertisers and their agencies must “conspicuously disclose” when synthetic performers appear in advertising that they produce or create, in any media in which that advertisement appears. However, there are several exceptions to this law:

• It does not apply to audio advertisements.
• It does not apply when generative AI is used solely to translate the language of a human performer.
• It does not apply to advertisements and promotional materials for expressive works, such as television, movies, video games, and the like, so long as the use of a synthetic performer in the advertising materials is consistent with what’s in the actual content.

This law will not apply to media providers that carry advertising, nor will it affect the protections of Section 230 of the Communications Decency Act, which shield online platforms from liability for content provided by their users. The requirements of this law are targeted squarely at advertisers and those involved in advertising creation.

Advertisers and agencies in violation of this law will face a civil penalty of $1,000 for a first violation, and $5,000 for subsequent violations.

Federal: White House Executive Order on National AI Policy

Hours after Gov. Hochul signed the New York synthetic performer disclosure bills into law, President Trump issued an executive order declaring: “It is the policy of the United States to sustain and enhance the United States’ global AI dominance through a minimally burdensome national policy framework for AI.”

The goal of the Executive Order is to overturn or halt enforcement of state AI laws that conflict with the Administration’s policy priorities.

The Executive Order points out that, among other things, state-by-state regulation of AI “creates a patchwork of 50 different regulatory regimes that makes compliance more challenging.” The Order encourages Congress to work with the Executive Branch to establish a national framework for regulating AI that imposes minimal burden on companies, and prevents censorship, while maintaining protection of children and communities and respect for copyrights.

Such a national framework, when in place, would then preempt state laws that conflict with it. The purpose of this approach is to avoid an outcome similar to the state-by-state patchwork of laws that has emerged in the consumer privacy space.

Next Steps and Immediate Uncertainties

Until a national AI law is established, this Executive Order demands that the Attorney General swiftly establish a task force to challenge state AI laws that “unconstitutionally regulate interstate commerce, are preempted by existing Federal regulations, or are otherwise unlawful in the Attorney General’s judgment.” It also demands that the Commerce Department publish, by March 2026, an evaluation of existing state AI laws that are “onerous” and in conflict with federal policy priorities.

States that are determined to have “onerous AI laws” will become ineligible to receive certain federal funds for enacting universal broadband and high-speed internet infrastructure, as well as other discretionary federal grants.

Further, the Executive Order also requires the Federal Trade Commission to issue a policy statement regarding whether state laws that “require alterations to the truthful outputs of AI models” may be violating the FTC’s prohibitions on unfair and deceptive acts and practices and requires the Federal Communications Commission to consider adopting a federal “reporting and disclosure standard for AI models” that would preempt conflicting state laws.

This Executive Order is particularly notable because earlier this year, congressional efforts to impose a moratorium on state AI laws failed amid significant bipartisan opposition. Lawmakers on both sides of the aisle view it as unwise to eliminate state AI laws when there is no federal AI law that could take their place.

The Executive Order is all but certain to face legal challenges as lawmakers and state attorneys general, along with industry groups, oppose its legality and enforceability in the absence of congressional action.

Legal Regulatory Consequences for Advertisers and States

If the policy priorities in the Executive Order are implemented, states will likely soon face aggressive legal challenges to their AI laws. California, Colorado, Utah and other states with comprehensive AI laws are likely to attract significant federal attention. Other states may preemptively impose a moratorium on enforcing their own laws due to fears of losing federal funding. However, the Executive Order itself is likely to face legal challenges, raising questions about its efficacy and enforceability.

In the face of this uncertainty, for the time being, advertisers should continue to adhere to applicable state AI laws and prepare for compliance with newly enacted AI laws, including New York’s new disclosure law. Advertisers and agencies should review their current production and disclosure practices to determine whether to use synthetic performers in their materials and, if so, ensure that clear and conspicuous labels are ready to be applied.

New York’s synthetic performer disclosure law aligns with emerging norms that encourage disclosure when photo-realistic synthetic people appear in consumer-facing media. This law is consistent with SAG-AFTRA policy goals, transparency policies of many social media platforms and similar disclosure requirements that will soon be imposed by the European Union AI Act in August 2026.

Although the New York law may be affected by the new federal policy position, it also may very well survive the Executive Order’s attempt at preemption – at least for now. Advertisers and agencies should prepare for compliance in the short term and closely monitor federal and state legal developments for further changes over the next six months.

The Bottom Line

• New York passed a new AI law requiring advertisers to disclose the use of synthetic performers in commercials. The law takes effect in June 2026.
• Simultaneously, a White House Executive Order issued on December 11 seeks to pause all state AI laws that conflict with federal policy goals of minimizing regulation. The Executive Order expresses the need for a single, national AI law that would preempt the dozens of state AI laws currently in effect.
• Though some states may face aggressive federal challenges to their AI laws, the Executive Order itself is likely to be challenged in court. In the face of this uncertainty, advertisers should continue to prepare for compliance with the New York disclosure law and monitor developments over the next six months.