California Senate Bill 942 (SB 942): California AI Transparency Act

1. Overview

On September 19, 2024, Governor Gavin Newsom signed California Senate Bill 942. The bill is known as the California AI Transparency Act. This law requires companies that make generative artificial intelligence (GenAI) systems with over a million monthly users to provide resources and information. This is to ensure transparency about the content generated by artificial intelligence. The rules from SB 942 will start on January 1, 2026, in practice.

Scope of the Law

SB 942 applies to “covered providers.” These are organizations that create, develop, or manufacture a Generative AI system that is publicly available in California and has more than one million monthly users. The law specifically focuses on text, images, video, and audio that replicate the structure and features of the training data of the system and are created or changed by AI systems.

3. Key Provisions

• AI Detection Tool: A free AI detection tool that is available to the public must be provided by covered providers. In order to increase efficacy, this tool must give metadata about the provenance of the content, enable users to determine whether the content was produced or modified by the provider’s GenAI system, and support user feedback.
• Manifest Disclosure:Providers are required to give users the choice to add a manifest disclosure to content produced by AI. This disclosure needs to make it obvious that the content is artificial intelligence (AI) generated, be easy to spot and comprehend, and be challenging to remove.
• Latent Disclosure: In AI-generated content, providers are required to incorporate a latent disclosure that contains details about the system, the provider’s name, and the creation time. The AI detection tool must be able to identify this disclosure, and it must be difficult or impossible to remove, to the extent possible.
• Third-Party Licensing: If a covered provider grants a third party a license to use its GenAI system, the provider must make sure that the third party is required to maintain the system’s functionality and make the necessary disclosures. The provider has 96 hours to cancel the license if they discover that the third party has changed the system to stop disclosures.

4. Penalties & Enforcement

Due to the violation of SB 942, the civil penalty may range up to $5,000 per violation. They are enforceable by civil actions brought by the California Attorney General, city attorney, or county counsels, too. Causing a violation every day is regarded as an additional offense.

Practical Implications

• To Developers: Entities should be ready to apply AI detection software and bring in manifest and latent disclosures into their systems. They should revise third-party contracts involving licenses to ensure that it is not disregard the law.
• To Users: People will become more transparent about the piece of content created by AI. It will enable them to be more aware when deciding on the media that they consume.
• To Legal Professionals: Legal counselors ought to guide the clients on the necessities and the new demands of how to be observed. These involve ensuring that contracts are reviewed and any technological amendments are undertaken.

SB 942 is an important step on the path to making the application of generative AI technologies transparent and accessible. Approaching the effective beginning of the law, the stakeholders ought to act to comply with the demands. This will assist in ensuring compliance and developing trust in AI-generated content.