Defending AI-washing claims in the new enforcement era

Partner Ashwin Ram authored an article examining how companies and defense counsel should respond to the growing wave of “AI-washing” enforcement and litigation risk, following its evolution from regulatory scrutiny to civil and criminal exposure. The article analyzes how traditional securities law defenses, including puffery, scienter, PSLRA safe harbor, loss causation, and materiality, are being adapted to a new category of AI-related corporate statements that straddle the line between aspirational claims and verifiable assertions. It highlights emerging case law, including Lamontagne v. Tesla, In re General Motors Securities Litigation, and In re GigaCloud Tech. Inc. Securities Litigation, to illustrate a developing doctrinal boundary: generalized, aspirational AI claims remain protected, while specific, data-driven performance representations are actionable and demand evidentiary support.

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