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ARTICLE · 05 NOVEMBER 2026

AI Washing Litigation

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As artificial intelligence becomes a focal point for investors, a surge in securities class action lawsuits alleges that companies are exaggerating their AI capabilities and financial benefits—a practice dubbed "AI washing." With US filings reaching record highs in early 2026, Canadian issuers face mounting pressure to ensure their AI-related disclosures are accurate, substantiated, and free from misleading claims about technological sophistication or competitive advantages.

GlobalLitigation, Mediation & Arbitration
Gillian Dingle
Gillian Dingle
Stacey Reisman
Stacey Reisman
Ronke Akinyemi
Ronke Akinyemi
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In the first half of 2026, there have been more AI-related securities class action filings in the United States than in all of 2025, representing the highest number of such claims in the last five years. Many of them involve allegations of “AI washing”, a term that mimics “greenwashing” and is used to describe issuers allegedly exaggerating or misrepresenting the role, capabilities, or impact of AI on their key business metrics, including financial performance, to capitalize on investor enthusiasm for AI.

US examples

The following are examples of allegations from recent claims in the United States:

  • Using vague AI buzzwords (such as “AI powered” and “machine learning-driven”) to create a perception of sophistication

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