AI companies face scrutiny over transparency law compliance

New regulatory requirements for artificial intelligence transparency are facing varying levels of compliance and industry pushback. In California, a law that went into effect on August 2 requires AI companies with over 1 million users to provide metadata for synthetic content and make detection tools publicly available. An independent review of 13 major companies found that only seven had published the legally required tools, with companies such as HeyGen, Midjourney, Mistral, Synthesia, and xAI identified as lacking available tools.

Simultaneously, the Interactive Advertising Bureau (IAB) has released its second version of the AI Transparency and Disclosure Framework. The voluntary framework aims to help the advertising industry self-regulate by determining when generative AI involvement in creative assets warrants a consumer-facing label. The IAB's guidance follows an NYU Stern study suggesting that disclosing AI involvement can reduce advertisement click-through rates by 31.5 percent. This industry guidance arrives amid a complex regulatory landscape, including the implementation of the European Union's AI Act and synthetic performer disclosure laws in New York.