Artificial Intelligence

Last week, when I wrote about two recent AI-related SEC enforcement actions, I noted that the SEC’s public statements when it announced the enforcement action settlements not only underscored the SEC’s AI-related concerns but also illustrated the kinds of issues that could lead to private securities litigation brought by investors who claim they were misled by companies’ AI-related disclosures. In the latest example showing how company disclosures relating to artificial intelligence can lead to securities litigation, a plaintiff shareholder has filed a securities suit against a security screening company alleging that the company’s public statements about its AI-enabled products and services were misleading. A copy of the March 25, 2024, complaint can be found here.Continue Reading Security Screening Company Hit with AI-Related Securities Suit

In any discussion these days of emerging directors’ and officers’ risks, the conversation inevitably turns to the topic of Artificial Intelligence (AI). There is a general perception that while AI presents significant opportunities, it also involves significant liability risks. The contours of the risk that AI represents have yet to develop, largely because the claims have yet to emerge. That is, until now.

Earlier this week, a plaintiff shareholder filed a securities class action lawsuit against the AI-enabled software platform company, Innodata. The plaintiff claims the company misrepresented the extent to which the company’s products and services actually employ AI technology and also the extent of the company’s investment in AI. As discussed further below, as far as I know, this case represents the first AI-related securities class action lawsuit to be filed. A copy of the plaintiff’s February 21, 2024, complaint can be found here.Continue Reading First AI-Related Securities Suit Filed

Sarah Abrams

Many readers may have seen the recent news that the New York Times had sued Microsoft and OpenAI alleging that OpenAI’s use of New York Times content to train their AI tool’s database infringed the newspaper’s copyright. The lawsuit raises its own set of issues but lawsuits of this type relating to AI development also pose an interesting set of insurance coverage related issues. In the following guest post, Sarah Abrams, Head of Professional Liability Claims at Bowhead Specialty, takes a look at the insurance questions that these kinds of lawsuits present. The views of the author are her own and not necessarily that of Bowhead Specialty Underwriters. I would like to thank Sarah for allowing me to publish her article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: Can There Be “Misappropriation of Trade Secret[s]” in the Age of AI?’

The directors’ and officers’ liability environment is always changing, but 2023 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2024 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2023, with a focus on future implications. Please note that on Thursday, January 11, 2024 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2023. Registration for the webinar can be found here. I hope you can join us for the webinar.Continue Reading The Top Ten Stories in D&O of 2023

The risks and opportunities that AI presents have emerged quickly and may be evolving even faster; the whole AI phenomenon has developed much more quickly than legislators’ and regulators’ ability to respond. Among the many AI effects that regulators and other observers are struggling to assess is the extent of the AI-related litigation potential, including but not limited to the prospects for AI-related corporate and securities litigation.Continue Reading SEC Chair Warns Against “AI Washing”

One of the most topical and potentially most significant recent developments had been the release of several different language-based generative artificial intelligence tools, such as ChatGPT and Google’s Bard. The advent of these tools, their ease of use, and their responsiveness has led to observers and commentators to question whether these tools could drive significant changes in the economy and labor force – among other things, for example, whether these tools might have significant implications for the practice of law. My own experience (discussed here) is that while these tools are interesting, they are no substitute for the research and writing of an experienced lawyer. A recent case, involving an experienced New York lawyer who relied on ChatGPT generated content in a legal brief in a client’s case, demonstrates the dangers involved for anyone who relies on ChatGPT as a substitute for legal research. The case was described in a May 27, 2023, New York Times article entitled “Here’s What Happens When Your Lawyer Uses ChatGPT” (here).Continue Reading AI is Not Quite Ready to Replace the Lawyers

You can hardly turn on any of your various devices these days without encountering yet another hyperventilating article or program about ChatGPT or, more generally, about artificial intelligence (AI) chat bots. Time magazine recently ran a cover story about ChatGPT and the AI chat bot race. As if that were not enough to signal that ChatGPT has arrived as the social phenomenon du jour, the Wall Street Journal recently ran a long self-consciously serious op-ed column in which Henry Kissinger and two other public intellectuals called ChatGPT “a new technology [that] bids to transform the human cognitive process.” Wow! OK, then.

Despite these and many other recent signs and signals of impending doom, I was fully prepared to ignore ChatGPT and carry on with my life – that is, until one of my colleagues recently asked me whether, given that advent of ChatGPT, my days as a blogger are about to come to an end? The question, in its simplest form, is whether I am about to be replaced by a machine. If you listen to the current ChatGPT hype, it may be a question that all of us need to be asking ourselves.Continue Reading Are We All About to be Replaced by AI Chat Bots?

Sarah Abrams

In the following guest post, Sarah Abrams, Head of Professional Liability Claims at Bowhead Specialty, takes a look at the challenges that financial trading based on Artificial Intelligence (AI) could mean for D&O, Professional, and Cyber insurers. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: AI Financial Trading; A Brave New World for Insurers