Summary:

 House Bill 401 (HB 401) enacts the Artificial Intelligence Synthetic Content Accountability Act, establishing civil and criminal penalties for the misuse of synthetic content created by artificial intelligence (AI). The bill requires AI-generated content to be labeled with watermarks and provenance data, restricts the dissemination of harmful synthetic content, and mandates identity verification for posting AI-generated content on large online platforms. The bill grants enforcement authority to the Attorney General and requires compliance reporting from AI providers. HB 401 takes effect on July 1, 2025.
 

Legislation Overview:

 House Bill 401 (HB 401) regulates AI-generated synthetic content by establishing legal requirements for labeling, classification, and dissemination. The bill defines synthetic content as any image, video, or audio material significantly modified by a generative AI system. It mandates that AI providers embed watermarks and provenance data in AI-generated content to verify authenticity and track modifications.

The bill prohibits the improper dissemination of synthetic content, making it illegal to knowingly distribute altered AI-generated material that depicts a person engaging in conduct they did not perform if done with intent to harass, defame, extort, or cause reputational harm. Civil penalties include damages of at least $10,000 per violation, and criminal penalties for violations include a fourth-degree felony.

HB 401 requires large online platforms with over 100,000 New Mexico users to implement identity verification for users posting AI-generated content that purports to depict real events. Platforms must also classify and label uploaded content as fully synthetic, partially synthetic, or of unknown provenance. AI providers must conduct red-teaming exercises to assess vulnerabilities in their watermarking systems and report failures to the Attorney General.

The Attorney General is authorized to enforce compliance, issue civil investigative demands, and seek penalties for violations. The bill includes exemptions for scientific research, law enforcement, legal proceedings, and content that is clearly labeled as satire or parody. HB 401 takes effect on July 1, 2025.

Implications

HB 401 introduces significant regulatory requirements for AI-generated content, aiming to curb misinformation, identity fraud, and reputational harm. AI providers and online platforms will face new compliance obligations, including embedding watermarks, verifying user identities, and conducting AI security assessments.

The bill’s enforcement mechanisms provide strong consumer protections but may impose technical and financial burdens on AI developers and online platforms. The effectiveness of the law will depend on its enforcement and the ability of AI providers to implement robust watermarking and tracking technologies.
 

Current Law:

 New Mexico does not currently regulate AI-generated synthetic content. Existing laws related to defamation, fraud, and privacy rights may apply to harmful AI-generated content, but no comprehensive framework exists to mandate watermarking, identity verification, or AI provider accountability.