U.S. First Digital Human Ad Law Takes Effect! Fines for Businesses Failing to Label AI-Generated Content

[Ebrun Exclusive] June 9, New York State's "Synthetic Performer" advertising disclosure law officially took effect today. The law mandates that advertisers or creators, when aware that an ad contains a "Synthetic Performer," must prominently label the ad with the statement: "This advertisement uses a synthetic performer." Violators face civil penalties: a $1,000 fine for the first violation and a $5,000 fine for each subsequent violation.

According to the law, a "Synthetic Performer" refers to digital image or video material created, replicated, or modified using generative AI or software algorithms, with audiovisual effects simulating a human performance. Notably, the regulatory scope is not limited to AI-generated content; digital human likenesses created using traditional visual effects algorithms are also covered. However, digital likenesses imitating real celebrities remain governed by existing right of publicity laws and fall outside this law's purview.

The bill amends Section 396-b of the New York General Business Law and was signed by New York Governor Kathy Hochul on December 11, 2025 (Bill No. S.8420-A/A.8887-B). It aims to regulate the use of virtual performers created by generative AI and digital algorithms in commercial advertising, marking the first state-level legislation in the U.S. specifically governing the use of digital human likenesses in advertising.

The law includes several exemptions. Promotional advertisements for creative works such as films, series, streaming content, documentaries, and video games do not require disclosure if the use of the virtual likeness in the ad is consistent with its use in the original work. Purely audio advertisements and scenarios where AI is used solely for language translation of a real human performer are not subject to this law. Ad publishers/platforms such as newspapers, TV stations, streaming services, and outdoor advertising are not responsible for the disclosure duties stipulated by this law.

Analysis points out that the law does not specify detailed requirements for the specific form, placement, or format of "prominent disclosure," leaving the enforcement standards to be clarified through enforcement practices and industry conventions. Furthermore, President Trump signed an executive order on December 11, 2025, aimed at reducing the regulatory burden on the AI industry, and this law may face future legal challenges.

According to recommendations from Cooley LLP, businesses advertising in New York State should promptly conduct a comprehensive review of existing advertising campaigns and promotional materials to identify content involving digital humans, virtual avatars, and virtual supporting characters. They should also incorporate special labeling for synthetic performers into their creative review processes. Simultaneously, businesses should refine their contracts with advertising agencies, production companies, and AI technology service providers to clearly define responsibility for identifying and disclosing synthetic performers, and establish corresponding internal documentation and reporting mechanisms.

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