Legal Liability Risks for Companies Using Generative AI: What You Need to Know

The Legal Risks of Using Generative AI: What Companies Need to Know

Companies that utilize generative AI technology may be unknowingly exposing themselves to legal liability, according to a recent article shared with Axios. While much of the legal discussion surrounding genAI has focused on the liability of the technology developers, the users of this technology may also be at risk.

The 100-page article, published in NYU’s Journal of Legislation and Public Policy, provides a comprehensive overview of the legal landscape surrounding generative AI in both the U.S. and globally. EqualAI CEO Miriam Vogel, a co-author of the article, emphasized that many companies are mistaken in believing that there is no liability for their use of genAI or that liability solely rests with the technology developers.

In the absence of specific legislation governing genAI in the U.S., existing laws still impose liability for outcomes related to key issues such as housing, lending, and employment. Regulators have made it clear that these laws apply regardless of whether genAI was used intentionally or not. Additionally, even companies that believe they are not using AI may find that its unofficial use is widespread, potentially leading to unintended consequences such as discrimination.

The article aims to educate companies on the legal risks associated with generative AI use while also encouraging the responsible and informed adoption of this technology. As the courts navigate how existing laws will be applied to genAI, particularly in areas like intellectual property, it remains crucial for companies to proceed with caution and awareness.

Ultimately, the goal is not to discourage the use of AI but to ensure that it is utilized in a manner that aligns with legal standards and best practices. By approaching the use of generative AI with transparency and understanding, companies can harness its benefits while mitigating potential legal risks.