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New York's S.8420-A/A.8887-B, the first law of its kind in the United States, is now in effect. It amends New York General Business Law and requires advertisers to conspicuously disclose when an advertisement contains a digitally created human image generated (or modified by) generative AI, intended to give the impression of a real human performer.
What New York actually did, whether it intended to or not, is hand brands a mechanism to address a problem that was already compounding before any legislation existed: consumers don't trust AI-generated ads, and most brands have not made moves to fix that issue. How you present AI-generated creative to consumers determines whether a campaign builds trust or quietly burns it.
The Adoption Curve and the Trust Curve Are Moving in Opposite Directions
AI-generated creative is now a standard production tool. 83% of ad executives report their company has deployed AI in the creative process, up from 60% just a year ago (IAB, "The AI Ad Gap Widens," January 2026). The efficiency gains are real, the creative possibilities are real, and the technology keeps improving.
What's also true: consumer trust hasn't kept pace.
IAB research published in January 2026, based on a survey of 500+ Gen Z and Millennial consumers and 100 advertising industry executives, puts a number on the gap. 82% of ad executives believe those consumers feel positive about AI-generated ads. Only 45% actually do. That's a 37-point perception gap. (IAB, "The AI Ad Gap Widens," January 2026)
Brands are scaling AI creative production while the audiences receiving those ads are growing more skeptical. That gap doesn't close on its own. And the disclosure requirement New York just mandated is, whether brands treat it this way or not, one of the few mechanisms that can actually start to close it.
What Most Brands Are Getting Wrong
The dominant response to S.8420-A right now is a compliance checklist. Add a label, audit the creative library, update agency contracts, move on.
That framing misses the actual leverage here.
The same IAB research found that many consumers said knowing an ad was made with AI would increase their likelihood to purchase (IAB, "The AI Ad Gap Widens," January 2026); a sign that transparency, at minimum, doesn't hurt performance. What it requires is intention. A disclosure buried in the corner of a frame, technically present but visually designed to be ignored, does nothing for trust. It signals that the brand has something to minimize rather than something to stand behind.
The brands that handle disclosure with confidence: prominently, consistently, without apology are doing something different. They're telling audiences they have nothing to hide about how they work. That's not a legal posture. That's a brand posture. And with a 37-point gap between what executives believe consumers feel and what consumers actually feel, the brands willing to close that gap through transparency have room to run.
AI creative isn't going away. Neither is consumer skepticism about it. New York's law created a floor, a minimum requirement for disclosure. What brands do above that floor is a choice. The ones that treat it as a trust signal rather than a disclaimer are going to earn something the compliance-first approach never will, an audience that actually trusts what it's seeing.
