SEC Chair warns companies against “AI Washing”

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Dec 06, 2023

On December 06, 2023, the Securities and Exchange Commission (SEC) Chair, Gary Gensler, highlighted concerns about companies potentially overstating their AI capabilities, drawing parallels with the concept of "greenwashing."

Gary’s recent warnings against "AI Washing" underscore the rapid evolution of AI and its potential implications on corporate behavior, particularly within the realms of corporate and securities litigation. In a speech before an AI industry group, Gensler emphasized the importance of accurate and fair descriptions of AI-related processes, cautioning against misleading investors.

He also discussed the challenges of assessing AI-related litigation risks and explores concerns regarding the financial services industry's adoption of AI tools and potential impacts on decision-making processes, highlighting the broader legal principles that apply in the context of emerging technologies like AI.

Access the article on The D&O Diary’s website

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