Artificial intelligence has made advertising faster, cheaper and increasingly difficult to distinguish from original human content. But the technology is also creating a new problem for companies.
What happens when an advertisement appears to borrow a creator’s work without permission and then digitally changes the person appearing in it?
That question is now confronting Kalshi after YouTube creator Elliot Choy accused the prediction-market company of taking one of his videos, recreating it with artificial intelligence and altering his appearance so that he appeared to be white.
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Choy posted side-by-side images of his original video and the Kalshi advertisement, highlighting similarities in the apartment setting, composition and presentation.
The controversy is significant because it goes beyond an ordinary dispute over advertising style. At its core are questions about ownership, consent, likeness and the increasingly complicated boundary between inspiration and imitation.
Kalshi said the advertisement was approximately four months old and had been produced by an outside agency. The company said it had curtailed its use of AI-generated advertising depicting people and was reviewing its relationship with the agency responsible for the campaign.
Kalshi did not publicly identify the agency. For creators, the issue is larger than one advertisement. The episode follows a similar dispute involving creator Pushpek Sidhu earlier this year. Sidhu said a Kalshi advertisement closely replicated one of his videos about the 2026 FIFA World Cup.
Including much of the structure and dialogue, while featuring another person. He also said Kalshi had previously contacted him about a possible collaboration. These incidents illustrate the uncomfortable economics of generative AI.
A company can potentially take an existing visual concept, feed it into an AI system and produce a modified version without paying the original creator. From a marketing perspective, that can appear efficient.
From the creator’s perspective, it can look like the value of their work has been extracted without permission or compensation. The technology makes the process particularly powerful because video-to-video systems can preserve elements of an original recording while changing faces, voices, environments or other characteristics.
Industry experts cited in reporting on the controversy have noted that such tools make it technically straightforward to transform existing social-media videos. That creates a difficult legal and ethical landscape.
Copyright law does not automatically make every imitation unlawful, while the use of a person’s likeness can raise separate legal questions depending on the circumstances and jurisdiction. Consequently, the central dispute cannot simply be reduced to whether AI was involved.
The controversy also arrives as AI-generated advertising becomes increasingly common. Research cited in recent coverage found generative AI appearing in a meaningful share of advertisements, although it remains only a portion of the overall market.
The lesson is increasingly practical: automation does not eliminate responsibility. If an agency uses AI to reproduce recognizable elements of a creator’s work, the brand may still face the reputational consequences even when the agency technically produced the advertisement.
For creators, the incident demonstrates another challenge of the digital economy. Their videos are not merely entertainment; they are intellectual property, personal branding and, increasingly, commercial assets.
Kalshi’s decision to review its agency relationship and reduce its use of AI-generated advertisements involving people shows how quickly the cost-saving promise of AI can collide with questions of trust.
The broader advertising industry is now confronting a fundamental question: when AI can reproduce almost anyone’s work or likeness in seconds, who gets to decide when imitation becomes appropriation? The answer will shape not only advertising, but the future relationship between creators, platforms, agencies and artificial intelligence.