AI in the Art Market, Part 3: Human Creativity and Authenticity

This is the third article in a three-part series. The first article, "Artificial Intelligence in the Art Market," was published on April 20, 2026. The second article, "AI in the Art Market, Part 2: Dataland, Training Data and Data Rights," was published on September 14, 2026.

As artificial intelligence (AI)-generated and AI-assisted works become more visible – exemplified by institutions like Dataland, the first museum dedicated to AI-generated art – the art world faces fundamental questions about what distinguishes human creativity from machine output and how stakeholders should respond to the blurring of that line. These questions have significant implications for copyright, market positioning, reputational risk and disclosure obligations.

The Shifting Debate

Much of the early discussion surrounding AI focused on technical capabilities such as whether AI can generate images, music, text or video. However, artists increasingly frame the debate around distinctly human qualities – lived experience, authorship, community and creative expression. Writers, illustrators and visual artists have expressed concern that AI trained on copyrighted creative works may dilute the economic value of artistic labor while simultaneously reproducing stylistic elements without authorization. Though some view AI as another tool – similar to photography or digital editing that may ultimately be integrated into artistic practice – others worry that widespread reliance on generative tools may erode human creativity or diminish demand for human-created work. This uncertainty makes AI use a legal, commercial and reputational issue, not just a technical one.

These concerns implicate unresolved legal questions such as whether training AI models on copyrighted works constitutes fair use (a question still being actively litigated in federal courts, as explained in a previous Holland & Knight alert) and whether AI-generated outputs that are similar to training data may give rise to infringement claims. For example, on September 1, 2026, the U.S. Department of Justice (DOJ) filed a statement of interest in a copyright litigation, arguing that training AI models on copyrighted materials constitutes fair use when doing so may advance national security interests. The DOJ emphasized that foreign competitors are not subject to the same copyright constraints when training their AI models. Although the DOJ statement may carry persuasive weight, it is not legally binding on the federal courts and has drawn divergent reactions across public media.

The proposed Creative Rights Ensuring Artists' Technique and Originality are Reserved (CREATOR) Act (H.R. 9112) would create a federal intellectual property right – distinct from copyright and trademark – against unauthorized commercial exploitation or public distribution of AI-generated visual works deliberately designed to emulate a specifically identified human artist's distinctive style in a way likely to mislead viewers or affect the market for that artist's work. Under the CREATOR Act, visual art means static visual media such as illustrations, prints and other mediums. It does not apply to video or motion pictures, creating limitations for the type of art and creators that are explicitly protected under the bill.

The proposed Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act, (S. 4591 and H.R. 8915), as explained in a previous Holland & Knight alert, reflects a parallel focus on human identity by requiring authorization for the use of a person's voice or visual likeness in digital replicas and imposing liability for certain unauthorized public uses and tools.

Additionally, the proposed Copyright Labeling and Ethical AI Reporting Act (CLEAR) Act (S. 3813) calls for greater transparency by requiring developers of generative AI models to disclose to the U.S. Copyright Office which copyrighted works were used in their training datasets before officially releasing a commercial model.

Holland & Knight continues to track these bills' posture, and since the publication of Part 2 in this series, there have been no significant developments. The CREATOR Act, a bipartisan measure, is unlikely to advance this year given the limited legislative days remaining and competing priorities; if it stalls, the bill will need to be reintroduced in the next session. The NO FAKES Act has yet to move in the U.S. House of Representatives, though it has cleared the U.S. Senate Committee on the Judiciary and awaits further action on the Senate floor. Meanwhile, the CLEAR Act has neither gained a House companion nor advanced further this year. Although the future of these bills is uncertain, they highlight the core issues and solutions the U.S. Congress is weighing on AI and art, and industry stakeholders should keep a close eye on their progress.

Together, these proposals signal that AI disputes may turn on human identity and market harm, as well as copyright in underlying works.

Authenticity as a Market Differentiator

As AI-generated art becomes more sophisticated, the distinction between human-created and machine-generated content is becoming more difficult to identify. This reality has coincided with a growing emphasis on art that is demonstrably human. Some artists and designers are therefore embracing "anti-slop" aesthetics, which emphasize imperfections, handmade techniques and visible evidence of human involvement. In some respects, these developments resemble historical artistic movements that emerged in response to industrialization and mass production.

For galleries, auction houses and collectors, the rising emphasis on authenticity is giving rise to heightened expectations – and potential legal exposure – surrounding disclosure obligations. Disclosure could take several forms: consumer protection claims for art that is labeled and sold as human-made when it is in fact AI, inability to obtain copyright protections if the work contains insufficient human contribution, or reputational gallery harm if failures to disclose AI usage in purchased art are revealed post-sale. As courts and regulators continue to evaluate governing standards in this area, organizations should consider whether their existing practices adequately address emerging transparency expectations.

Transparency Expectations

Transparency expectations are not merely aspirational. They reflect an evolving legal and regulatory landscape in which disclosure failures may give rise to consumer protection claims, reputational harm or challenges to the copyrightability of the work itself.

In particular, the law is evolving toward requiring transparency regarding:

• whether AI tools were used in the creative process and the nature and extent of that use
• the degree of human involvement in the creation of the work
• whether the work was generated by an AI model designed to emulate the distinctive style of a specific artist, along with whether appropriate authorization and consent was obtained
• the provenance of training datasets, including whether they incorporate copyrighted, licensed or publicly available materials
• whether biometric, personal or proprietary data contributed to the work
• the role of automated systems in generating the final output

Considerations for Clients

As AI reshapes creative markets, organizations should align legal, compliance and business practices with emerging expectations for human creativity, authenticity, transparency and security. In addition to the considerations outlined in Part One and Part Two of this series, clients may consider:

• updating disclosures for AI-assisted works, exhibitions and marketing materials, including the role of AI, degree of human involvement and relevant consumer protection requirements
• developing AI governance policies for creative production that address copyrightability, infringement risk, reputational exposure and cybersecurity controls
• setting workflow standards for AI use, attribution, credit, representations of human authorship, and consent or authorization for likeness, style or identity-related uses
• engaging artists, creators and cultural stakeholders to build trust and align governance with creative community expectations
• monitoring judicial, regulatory, legislative and industry developments, as well as updating creator agreements, licensing terms, platform terms and AI policies accordingly

Conclusion

As AI-generated output becomes more sophisticated, organizations in creative industries must manage not only technological capability but also expectations around human creativity, authenticity, consent, transparency and security. Those that pair clear disclosures with thoughtful AI and cyber governance will be better positioned to preserve trust and navigate the evolving landscape.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.