As Hollywood transitions to four-year union contracts — at least for this labor cycle — SAG-AFTRA presented its new tentative agreement to members for ratification last week, and a lot of attention has been on AI. Specifically, the artificial intelligence protections that it says will guard actors against rapidly developing technology that is producing digital replicas of performers and synthetic actors, like the much-publicized Tilly Norwood.

With the AI genie out of the bottle and studios and producers increasing their experimentation with the tech, an outright ban is impossible for any union to negotiate. But SAG-AFTRA’s national executive director Duncan Crabtree-Ireland says that under its new agreement with the Alliance of Motion Picture and Television Producers (AMPTP), the new protections the union negotiated should hold strong even as AI continues to evolve.

 “There’s a lot of small pieces and mid-sized pieces that, when you take them all together, really represent, I think, a fundamental improvement in both the digital replication and the synthetic portion of our contract,” he said.

Still, some of these protections come not from language that is in the labor contract, but from the union reserving its ability to establish new protections as actual use cases of AI and synthetic performers arise amongst producers and AMPTP studios.

Heading into negotiations, it was expected that SAG-AFTRA would propose rules in the contract that would require any production that uses a synthetic performer to pay the union the equivalent of what it would have paid a SAG-AFTRA member to perform that role into a compensation fund. The idea of such a payment was that it would disincentivize producers from using synthetic performers as a way to cut costs, one of the major reasons why AI is drawing so much interest.

Two studio sources told TheWrap that the idea of such a payment — referred to colloquially as the “Tilly Tax” in a nod to Tilly Norwood — was a nonstarter for the AMPTP because using synthetic performers is something that is still only a hypothetical situation for the studios. In labor talks, the studios have always been reticent to establish contract language on technology that doesn’t have an established precedent of use, something that led to the strike-inducing impasse on AI back in 2023.

Instead, SAG-AFTRA and AMPTP agreed to an alternative that would give the studios flexibility and the union the ability to enforce rules on synthetics if and when producers wish to use them through a negotiation and arbitration system that SAG-AFTRA believes will disincentivize widespread use of the tech.

In the contract, the AMPTP agrees that it will continue to “overwhelmingly” use union performers for studios’ projects, and it will not use a synthetic performer to fill in a role that could be done by a union performer unless the synthetic brings “significant additional value” to the production. The producers of the project using the synthetic would have to notify and bargain with SAG-AFTRA and prove that their use of the synthetic brings that significant value.

And if an agreement between the producers and SAG-AFTRA isn’t reached, the union “may arbitrate seeking damages in an amount that will not necessarily be limited to the compensation that would have been paid to a natural performer for rendering the performance for which the Synthetic was used,” according to the 18-page summary of the agreement.

If that sounds like a very subjective phrase, you would be right, as insiders tell TheWrap that SAG-AFTRA and AMPTP did not include an agreed-upon definition of “significant additional value” in the contract. But one metric that was included in the contract is the requirement of a producer to prove that the synthetic performer would bring significant value not just compared to a union performer, but also to a digital replica of a union performer.

“When we think about the sort of justifications that producers have used for why they would want to use a synthetic, they talk about doing something that’s impossible to do with a human performer, even a stunt performer, whether it’s because it’s too dangerous or just physically impossible,” Crabtree-Ireland explained. “Maybe it is a situation where the character is itself synthetic, and therefore they want to use a synthetic output as a way of portraying that character.”

In scenarios where an actor’s safety is used as justification to use a synthetic, Crabtree-Ireland says that the union would be pushing for an explanation from producers as to why a digital replica of a SAG-AFTRA member couldn’t be used instead.

“With a digital replica, that AI performance is based on the voice and likeness of a union performer that is owed compensation and has consent protections,” Crabtree-Ireland explained. “And that is the primary difference between a replica and a synthetic. There’s very little distinction between the two in terms of capabilities, so I think that narrows the use of synthetics in a very significant way.”

And even in those situations where a producer decides to make that case in negotiation and possibly arbitration with SAG-AFTRA, Crabtree-Ireland expects that the process would take roughly one month to complete, something the producer would have to factor in when locking down shooting schedules, soundstage and on-location use, and schedules for filmmakers and performers. In the union’s eyes, these required negotiations around “significant additional value” will disincentivize widespread synthetic use in film and TV in much the same way the “Tilly Tax” will for commercials.

Ivy Kagen Bierman, entertainment chair at law firm Loeb & Loeb, notes that these negotiations also allows SAG-AFTRA and the studios to iron out AI usage as it evolves and is implemented in real time, taking the context of specific use cases into account.

“I think it opens the door to continued discussion in real time on real projects as the use of AI in our industry evolves. It does lay the groundwork for the next contract cycle to make this more concrete if needed,” she said.

Crabtree-Ireland acknowledged that for many SAG-AFTRA members, the rise of AI has created a genuine fear that if studios adopt replica and synthetic technology en masse, the jobs for working class actors will severely diminish. But he wants his union’s members to remember that the uncertainty around AI, which still has many legal gray areas to work out, isn’t just being felt by the workforce.

“If you feel uncertainty regarding AI, recognize that the company likely feels that uncertainty too, and that uncertainty is itself a deterrent,” he said. “As a company, they are taking a risk when they decide to go down that path, because there are consequences if an arbitrator disagrees about whether a synthetic delivers significant additional value.”