AI Hallucinations: When Creation Comes At A Cost, Who Pays?

Artificial Intelligence has transformed the way information is processed and consumed, offering unprecedented capabilities and value across fields like medicine, law, journalism, and finance. However, alongside its advancements, AI models have been riddled with technological and regulatory challenges. One such conundrum has been regulation of AI hallucinations. AI hallucination occurs when Generative AI models (GenAI) produce factually inaccurate or misleading responses, and stem broadly from biases in or quality of training data and model limitations.

AI models may be categorised as intermediaries in instances like AI-powered search engines that retrieve and summarize third-party content, chatbots that transmit pre-existing information without independent analysis, and content recommendation systems that rank user-generated content without modification. Such platforms may be protected under safe harbour provisions given their role as a mere conduit. However, GenAI