New York RAISE Act Sets Artificial Intelligence Compliance Rules

New York RAISE Act Sets Artificial Intelligence Compliance Rules

https://natlawreview.com/article/new-yorks-raise-act-what-frontier-model-developers-need-know

Publish Date: 2026-01-02 17:12:00

Source Domain: natlawreview.com

• Revised Thresholds Post-Amendment: Following chapter amendments set for January 2026, the Responsible AI Safety and Education Act (RAISE Act) will require developers of frontier models generating annual revenues exceeding $500 million to comply with the law.

• Definition of Frontier Models: Frontier models are defined by AI systems trained using greater than (10^{26}) Flops (computational operations) and with compute costs exceeding $100 million. This includes models created through knowledge distillation using a larger model.

• Compliance Requirements: Covered developers must implement detailed safety and security protocols, conduct annual reviews, perform safety incident reporting within 72 hours, and retain no false statements as well as protect employee disclosures.

• DFS Oversight Office: New York is establishing an oversight office within its Department of Financial Services, which will conduct intensive examinations similar to its cybersecurity regulatory activities.

• Knowledge Distillation: The law explicitly includes smaller AI models created through knowledge distillation from qualifying larger frontier models, provided the developer exceeds the $500 million revenue threshold.

• Enforcement and Penalties: The Attorney General will enforce the act with civil penalties up to $1 million for first offenses and $3 million for subsequent violations after amendments.

• Implications for Frontier Model Customers: Organizations deploying models from covered developers must update contracts and prepare for operational impacts due to enforcement actions.

• Federal Preemption Challenges: Anticipated federal preemption challenges are likely, but compliance under state law is required regardless until federal courts issue final judgments invalidating it.