California will require Generative AI Watermarks

California Governor Gavin Newsom signed into law the California AI Transparency Act (SB 942) on September 19, 2024. The Act becomes effective on January 1, 2026 and covers the following providers and AI systems: 

Covered provider: a “person that creates, codes, or otherwise produces a generative artificial intelligence system that has over 1,000,000 monthly visitors or users and is publicly accessible within the geographic boundaries” of California 

Generative artificial intelligence system: any AI system “that can generate derived synthetic content, including text, images, video, and audio, that emulates the structure and characteristics of the system’s training data”

AI Detection Tool

For generative AI systems, covered providers must provide a free AI detection tool to users. Among other requirements, the AI detection tool must:

> Allow a user to “assess whether image, video, or audio content, or content that is any combination thereof, was created oraltered” by the covered provider’s generative AI system.

> Output “any system provenance data” that is detected in the content

> Does not output “any personal provenance data”that is detected in the content

The Act allows covered providers to place limitations on the AI detection tool “to prevent, or respond to, demonstrable risks to the security or integrity” of the generative AI system.It also outlines requirements for covered providers licensing their AI systems to third parties.  

Latent and Manifest Disclosures

The Act requires covered providers to include a “latent disclosure” in image, video or audio content, or “content that is any combination thereof,” that conveys either directly or through a permanent internet link, certain information about the covered provider and the generated output. Additionally, it requires covered providers to give users the option to include a “manifest disclosure” that clearly identifies the content as AI generated and is difficult to remove.

No Decision yet on SB 1047 

SB 942 is one of several AI bills that Newsom is considering and has until September 30 to sign. The most prominent of these is SB 1047, a wide-ranging bill that would introduce broad safety testing and reporting requirements for providers of powerful foundation models.

Newsom said on September 17 that balancing incentives to promote risk taking and deter recklessness is hard in the case of California SB 1047, due to the “outsized impact that legislation could have, and the chilling effect, particularly in the open source community.”  

California’s regulatory framework for AI is globally relevant, due to the number of leading AI firms headquartered in the state. 

 Enzai is here to help

Enzai’s AI GRC platform can help your company deploy AI in accordance with best practices and emerging regulations, standards and frameworks, such as EU AI Act, the Colorado AI Act, the NIST AI RMF and ISO/IEC 42001. To learn more, get in touch here.