New York State has introduced mandatory AI advertising disclosure requirements, creating a regulatory flashpoint as federal authorities weigh in. The new rules require clear labeling of AI-generated content in advertisements, marking a significant shift toward transparency in digital marketing. However, the policy faces potential conflict with broader federal directives, sparking debate over jurisdiction and enforcement mechanisms. This development has implications for platforms operating across multiple regulatory frameworks, particularly those in the crypto and digital asset space. The showdown reflects growing tension between state-level consumer protection efforts and federal policy priorities, setting precedent for how AI technologies will be governed in financial and commercial advertising.