New York Mandates AI Advertising Disclosures, Setting Up Clash With Trump Executive Order
New York has become the first U.S. state to require advertisers to disclose when commercials include AI-generated synthetic performers, according to an announcement from Governor Kathy Hochul. The move arrives as President Donald Trump signed an executive order aimed at curbing state-level AI regulation and steering the U.S. toward a single national framework.
Hochul signed two SAG-AFTRA–backed bills. One law requires anyone who produces or creates an advertisement to identify if it includes AI-generated synthetic performers. The other measure, identified as S.8391, requires consent from heirs or executors if someone seeks to use a person’s likeness in certain contexts.
New York’s disclosure requirement includes financial penalties. Violations incur a $1,000 fine for the first instance and $5,000 for subsequent violations.
The state action lands in the middle of a broader national debate over how AI should be governed, and whether states should be able to set their own rules when Congress has not enacted comprehensive AI legislation.
Across the country, dozens of states have passed AI-related laws in areas such as:
- banning the creation of nonconsensual nude images using AI,
- requiring government agencies and businesses to disclose AI usage,
- mandating checks for algorithmic discrimination, and
- protecting whistleblowers.
Trump’s executive order directly challenges that state-by-state approach. During the announcement, David Sacks, the White House AI and crypto czar, said: “We have over a thousand bills going through State legislatures right now to regulate AI, over a hundred of them have already passed, 25% of them are in California, New York and Illinois.” He argued that “50 states running in 50 different directions” does not make sense.
The executive order also outlines specific steps to identify and potentially counter state laws the administration views as conflicting with federal policy. It directs Commerce Secretary Howard Lutnick to produce, within 90 days, an evaluation of existing state AI laws that are considered “onerous,” and to refer those laws to an AI Litigation Task Force for potential challenge. The order says the evaluation must, at a minimum, flag laws that “require AI models to alter their truthful outputs” or compel disclosures or reporting in ways that could violate the First Amendment or other constitutional protections.
In parallel, the order instructs the Federal Communications Commission. It states that within 90 days of the publication of certain identification requirements, the FCC chairman, in consultation with the Special Advisor for AI and Crypto, should initiate a proceeding to determine whether to adopt a federal reporting and disclosure standard for AI models that preempts conflicting state laws.
The executive order also ties the federal government’s leverage to funding. States identified as having certain “onerous” laws may need to enter agreements not to enforce those statutes in order to receive discretionary federal funding.
Criticism of the executive order has been public. Rep. Don Beyer of Virginia called it a “terrible idea” that would “create a lawless Wild West environment for AI companies.” New York Assemblymember Alex Bores described the order as a “massive windfall” for AI companies.
The developments underscore a growing policy fault line that also matters for crypto and fintech: disclosure standards, federal preemption, and the scope of state consumer-protection rules increasingly shape how emerging technologies are marketed, deployed, and regulated in the U.S.