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Investor discussion: AI legal liability
Summary notes from an investor expert discussion with Gebriel Weil from the Institute for Law & AI and the Touro University Law Center on AI legal liability.
AI legal liability is central to investment materiality but remains uncertain and evolving with court cases and regulation. Three points from the discussion:
- Third-party harms are likely to create larger liabilities than harms to customers. Taking reasonable precautions is critical for AI developers to limit their potential liability from releasing a model that could be used for harm.
- Regulations are progressing, but fragmenting. The state-by-state picture is splitting between liability shields (Illinois SB 3444) and liability expansion (NY A8833, RI HB 5224). California SB 53 and NY’s RAISE Act are now law and non-compliance can be treated as evidence of negligence in subsequent injury cases.
- Investors can start by asking companies if they have assessed their AI legal liability and how they are managing this with third-party evaluation and insurance.