Jan. 26, 2026
The rise of 'AI-washing' claims in securities class actions
As AI hype accelerates, a wave of "AI washing" securities lawsuits--alleging companies overstated or misrepresented their AI capabilities--highlights the need for careful, fact-based disclosures, forward-looking safe-harbor language and proactive risk management to mitigate litigation exposure.
In the race to tout "cutting-edge" AI capabilities,
corporate optimism can outpace reality--and investors have taken note. In 2024
and 2025, shareholder plaintiffs brought approximately 29 federal securities
class actions alleging "AI washing"--the overstatement or misrepresentation of a
company's AI use, novelty or performance.
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