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ARTICLE · 26 MARCH 2024

Lessons For Businesses: Navigating AI Claims In A Regulatory Landscape

Brown Rudnick LLP
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In the fast-evolving world of finance and technology, the recent settlement between the U.S. Securities and Exchange Commission (SEC) and two investment advisers...

United StatesTechnology
Brandi Howard
Brandi Howard
Matthew Richardson
Matthew Richardson
Daniel Sachs
Daniel Sachs

In the fast-evolving world of finance and technology, the recent settlement between the U.S. Securities and Exchange Commission (SEC) and two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., serve as a stark reminder for businesses. This settlement and the accompanying civil monetary penalties highlight the importance of transparency, accuracy, and ethical communication when it comes to artificial intelligence (AI) claims. There are several key lessons that businesses can learn from this legal saga.

1. Beware of "AI Washing"

The allure of AI is undeniable. It promises efficiency, predictive power, and competitive advantage. Many consumers within various industries are beginning to expect companies will use AI to maintain efficiencies and bring costs down. However, the SEC has warned that businesses must resist the temptation to engage in "AI washing." This term refers to the practice of exaggerating or outright fabricating AI capabilities to

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