Source: Bloomberg Law

Bloomberg Law reports on an emerging trend in litigation known as "AI-washing," where companies are being sued for allegedly misleading investors and consumers about the extent and impact of their Artificial Intelligence capabilities. The article highlights recent class-action lawsuits filed against major corporations, including Apple, which accuse them of artificially inflating their stock prices by making exaggerated or false claims about their AI technology. This new line of litigation mirrors earlier "greenwashing" cases, where companies were targeted for deceptive environmental marketing.

These lawsuits allege that by overstating their involvement in the AI boom, companies are violating securities laws and consumer protection statutes. The core of the legal argument is that such claims are material misrepresentations that can deceive investors into making decisions based on false pretenses, leading to financial losses when the reality of the company's AI development comes to light. The rise of AI-washing cases signals a new area of legal risk for publicly traded companies, who must now be exceedingly cautious in how they communicate their AI strategies and achievements to the market. It also underscores the growing scrutiny from plaintiffs' attorneys who are actively looking for corporate hype that crosses the line into actionable deception.