What happened?

On September 9, the California legislature enrolled and presented to the Governor Bill SB 942, which would require a covered provider of an Artificial Intelligence (AI) system to create a system to identify any content generated by the AI.

Quick Summary:

• Providers must offer a free tool to identify AI-generated content. If a third party handles this, the provider must ensure compliance or stop using the license until it meets requirements.
• Non-compliance would result in a $5,000 per violation.

What are the details?

• This bill would apply to all covered providers, which are defined as “…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 the state.”
  • The bill has an exception.

• The covered provider must create a tool that identifies any type of content, by stating that it was generated by AI. This must be done at no cost to the user and must comply with the minimum requirements stated in the bill.
  • If this is done by a third party, the provider must be vigilant in knowing that the license can disclose the above information. If not, the licensee must cease its use until the provider can certify that it complies with the identification requirement.

• A covered provider that violates these provisions is liable for a civil penalty in the amount of $5,000 per violation to be collected in a civil action filed by the Attorney General, a city attorney, or a county counsel, plus reasonable attorney’s fees, and costs.
  • If the violation is done by a third-party licensee, the action can be brought forward to both parties (the provider and the third party).

Business Considerations

• Employers should prepare to ensure that their AI detection tools are publicly accessible and available at no cost to users, in the form, manner, and with the minimum requirements that the bill provides.
• Employers should monitor third-party licensees to ensure they do not modify licensed GenAI systems in ways that remove required disclosures and act swiftly to cease using a licensed GenAI system immediately if the provider has revoked the license.
• Employers should be aware of the civil penalties for non-compliance, which can amount to $5,000 per violation, and prepare for potential civil actions for injunctive relief and reasonable attorney’s fees and costs if they fail to comply with the Act’s provisions.

Source References

• CA SB 942
• California Privacy and AI Legislation Update: August 12, 2024 (Husch Blackwell LLP)
• SB 942: California AI Transparency Act Summary

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