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The law will not be updated or enforced. Laws don't reflect justice, they reflect the power relations in the society at the time the law was written.

Big tech is paying handsomely for this, and I don't think the populace is going to outbribe them.

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That's only doable if the ads are artificially injected. But what if they are part of the training, system prompt or the search results that are fed to the AI? What if Google Search bumps up their paying advertiser up in the internal search results for Gemini (as they are basically already doing)? The AI will be biased towards the advertisers without literally embedding an ad into the output text.
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> what if they are part of the training

No way Google is going to bake the ads into training data. Their entire business is built on auctioning off each ad slot in realtime.

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> if they are part of the training

That would be an intentional poisoning of the models with biased or outright untruthful data.

I believe that many people would be unwilling to use such models.

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They won't be if the models are "free", which is the case for AI Mode in Google Search. That's why common people still use Google despite it being an ad-ridden slopfest, it's "free"!
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It's just gonna say "this whole thing might be a big ad" and they will fight the fines in court for years, lose and book those fines as cost of doing business while laughing all the way to the bank
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