The rapid growth of livestream electronic commerce (e-commerce) has transformed the digital retail landscape, offering real-time interaction, personalized recommendations, and immersive shopping experiences. This research examines the dual impact of GAI on innovation and regulatory compliance in livestream e-commerce platforms. A quantitative approach was employed, surveying 455 participants who engaged with AI-enhanced livestream platforms to assess consumer perceptions, trust, and purchase intentions. KPI included viewer retention rate, purchase conversion, content originality, and compliance incident frequency. Data were analyzed using SPSS software and various statistical methods. Descriptive statistics highlighted a significant increase in user engagement and purchase conversion for sessions utilizing GAI content, with mean conversion rates rising from 3.8% to 7.2%. Inferential analyses, including paired-sample t-tests and multiple regression, indicated that while GAI-enhanced sessions positively influenced innovation metrics (? = 0.42, p < 0.01), they were associated with a moderate increase in compliance risks (? = 0.28, p < 0.05). Correlation analysis revealed a strong relationship between the level of AI content personalization and sales performance (p < 0.001), whereas high regulatory oversight mitigated compliance violations (p < 0.01). These findings underscore the importance of striking a balance between technological innovation and regulatory adherence in digital markets. The analysis provides empirical evidence to guide policymakers and platform operators in optimizing AI-driven livestream strategies while minimizing legal and ethical risks.