A working group will be set up to tackle issues from copyright to disinformation, the seven leading economies said in a final communique released during a summit in Hiroshima, Japan.
Text generation tools such as ChatGPT, image creators and music composed using AI have sparked delight, alarm and legal battles as creators accuse them of scraping material without permission.
Governments worldwide are under pressure to move quickly to mitigate the risks, with the chief executive of ChatGPT's OpenAI telling US lawmakers this week that regulating AI was essential.
"We recognise the need to immediately take stock of the opportunities and challenges of generative AI, which is increasingly prominent across countries and sectors," the G7 statement said.
"We task relevant ministers to establish the Hiroshima AI process, through a G7 working group, in an inclusive manner... for discussions on generative AI by the end of this year," it said.
"These discussions could include topics such as governance, safeguard of intellectual property rights including copyrights, promotion of transparency, response to foreign information manipulation, including disinformation, and responsible utilisation of these technologies."
The new working group will be organised in cooperation with the OECD group of developed countries and the Global Partnership on Artificial Intelligence (GPAI), the statement added.
On Tuesday, OpenAI CEO Sam Altman testified before a US Senate panel and urged Congress to impose new rules on big tech.
He insisted that in time, generative AI developed by his company would one day "address some of humanity's biggest challenges, like climate change and curing cancer".
However, "we think that regulatory intervention by governments will be critical to mitigate the risks of increasingly powerful models," he said.
European Parliament lawmakers this month also took a first step towards EU-wide regulation of ChatGPT and other AI systems.
The text is to be put to the full parliament next month for adoption before negotiations with EU member states on a final law.
"While rapid technological change has been strengthening societies and economies, the international governance of new digital technologies has not necessarily kept pace," the G7 said.
For AI and other emerging technologies including immersive metaverses, "the governance of the digital economy should continue to be updated in line with our shared democratic values", the group said.
Among others, these values include fairness, respect for privacy and "protection from online harassment, hate and abuse", among others, it added.
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