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The law specifies that the images are indistinguishable from reality and are presented as you, directly or indirectly.
If the images were of twin A and presented as twin B, I think this law would apply, as it would be fake porn of twin B.
Again, if it's being presented as someone it's not, that's an issue.
Then the law does not apply. That's literally how all laws work.
Was it presented as a nude of that person that did not yet exist? Impressive that they knew what their parents would name them ahead of time. Again, it must be presented as this person, directly or indirectly. This scenario couldn't happen.
Regarding trying to ruin someone's image, I imagine that would indeed fall under some form of defamation laws, although not slander as that is specifically spoken words. I do agree we must tread carefully regarding free speech rights, however are we not also expected to have our rights to privacy? Even if someone isn't trying to defame us, even if an image is fake, if at face value it's completely indistinguishable from being real does it make a difference? Obviously there's no simple solution and I think I agree with you that a law such as this probably isn't it.
I'm a bit lost on your last bit, however. Are you saying this law will further push AI into the hands of large corporations? I don't see that, so much as see them being forced to implement stronger filters, while pushing users to the open source community in search to get around them. Horny people gonna horny and this law won't stop that, it'd only stop public facing models from producing such content and stop individuals from distributing it.
Remember how taxi medallions were worth millions and millions of dollars in NYC and Boston before uber? (1.2m was the peak per medallion in nyc. They dropped to like 35k at one point and are now around 140k.) Remember how uber got billions in VC money to fight the taxi industry lobbyists and effectively operates despite violating the systems that were in place for ages that prevented small independent operators from being taxis without having a bunch of seed money? Those billions of dollars let them win the legal fights and continue operating. You or I could never have challenged it.
That's the comparison I was making. If you regulate AI into the ground the only innovations and usage will come from big money interests, because they can eat the lawsuits. Individuals can't eat the lawsuits. The law only applies to the small fries, the big guys cheat and get away with it because there is no transparency and a whole lot of pinky swears.