The rise of Artificial Intelligence (AI)-based tools and applications has also meant the rise in AI-related infrastructure, such as data centers and power generation support. And just as we have seen the rise of securities litigation relating to companies’ adoption of AI tools and processes, we have also seen securities suits relating to AI infrastructure development.

In the latest example of this kind of AI infrastructure-related litigation, on March 20, 2026, a plaintiff shareholder filed a securities class action lawsuit against the engine and power systems company Power Solutions International, alleging that the company’s new strategy of providing power generation solutions for AI data centers had fallen short of the company’s representations. A copy of the new complaint against Power Solutions can be found here.

Background

Power Solutions designs, manufactures, and sells engines and power systems. In the past, its sales primarily involved small engines for industrial and transportation uses. After experiencing declines in its traditional sales in the first half of 2025, the company, as the complaint puts it, “pivoted to lean into the booming data center market.” The company, according to the complaint, “claimed that providing power generation solutions amid the AI-drive data center expansion was driving both strong present and future performance,” citing these new sales as “high growth, higher-margin” business.

On March 2, 2026, the company released its fourth quarter and full year 2025 financial results, disclosing that rather than increasing due to the higher margin AI data center business, it gross margin had in fact decline 8% year over year due to “operating inefficiencies related to the Company’s accelerated production ramp-up for data center product lines.” In its outlook for 2026, the company projected, according to the complaint, only “moderate margin improvement from the products servicing the data center markets.” According to the complaint, the company’s share price declined nearly 29% on this news.

The Complaint

On March 20, 2026, a plaintiff shareholder filed a securities class action lawsuit in the Northern District of Illinois against Power Solutions and certain of its directors and officers. The complaint purports to be filed on behalf of investors who purchased the company’s securities between May 8, 2025, and March 2, 2026.

The complaint alleges that during the class period, the defendants failed to disclose to investors that: “(1) the Company overstated its ability to capture sales demand for its power systems solutions, particularly within the data center market; (2) the Company understated the impact of its enhancements to manufacturing capacity to meet demand  with the data center market, including the expected costs and the nature of the related ‘inefficiencies’; and (3) that as a result of the foregoing Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.”

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks to recover damages on behalf of the plaintiff class.

Discussion

It has already become apparent that AI-related securities class action lawsuit filings will include not only lawsuits filed against companies in connection with their adoption of AI tools and processes. We have already seen securities suit filings that involve AI-related infrastructure companies, as well.  

For example, in early January this year, a plaintiff shareholder filed a securities class action lawsuit against the start-up AI energy support company Fermi, which aims to build multiple power generation centers intended to provide dedicated power for AI workloads. The Fermi lawsuit is discussed in detail here.

Similarly, in February, CoreWeave, a AI cloud computing company delivering infrastructure and services through large data centers, was hit with a securities lawsuit after the company experienced delays in its data center development due to design revisions, weather delays, and other difficulties, as discussed here.

These prior lawsuits, and the new lawsuit against Power Solutions, involve allegations that the companies overstated their AI-related prospects and opportunities based on the companies’ AI infrastructure strategy. Meaning that these lawsuits could be categorized as “AI-washing” type lawsuits, a type of AI-related litigation that is well-developed.

Another common thread among these lawsuits is that the companies allegedly announced AI-centered business strategies that garnered significant investor enthusiasm, only for the companies to experience difficulties and set backs, as a result of which the company’s actual experience fell short of expectations, resulting in a share price decline.

This fact pattern seems highly likely to continue to recur in the weeks and months ahead. There is a great deal of investor interest in companies poised to take advantage of AI. Company management is understandably quite interested in trying to tap into this investor enthusiasm. Indeed, there appear to be quite a number of companies in the IPO pipeline with AI Infrastructure business strategies. Some of these AI infrastructure-focused companies will succeed in executing on their strategies. Others, like the defendant companies in these AI infrastructure-related suits, may encounter difficulties. It seems likely that many of these companies experiencing difficulties in executing on their AI strategies could also experience securities class action litigation.

In thinking about the extent of the potential exposure among these kinds of AI-adjacent companies, it is important to think about what industries and sectors might be affected by this dynamic.

Obviously, as the cases already filed show, these risks affect construction companies, energy supply companies, and data center infrastructure and services companies. There are also a host of other industries that potentially will be affected by the advent of AI; many companies in those industries will also face execution risk as they adopt AI-centered strategies. These other industries include, for example, finance; healthcare; logistics and transportation; education; professional services.

Based on this analysis, I think there is a probability (perhaps even a likelihood) that we will see cases like this, where companies face execution risk as they adopt AI-based strategies. These risks are most obvious for companies directly involved in the business of AI, as well as the AI infrastructure companies. But the risks are also there in many other industries, as increasing numbers of companies seek to adopt AI-centered strategies.

In any event, it is also worth noting that we are not yet even a quarter of the way through the year, yet, according to my tally, this case is the sixth AI-related securities suit to be filed in 2026. It seems increasingly likely that AI-related securities litigation will be a significant part of the overall volume of securities lawsuit filings in 2026.