With the rise of Artificial Intelligence (AI) has come waves of lawsuits against its creators. These lawsuits may take years to reach a conclusion as lawmakers race to catch up with the rapidly developing technology, but in the meantime it is good for your business to be aware of some of the potential legal hazards related to Artificial Intelligence.
Many lawsuits allege that AI has illegally been trained on copyrighted information including in the cases of:
These, and many other ongoing legal battles, complain that companies that profit off of Artificial Intelligence have stolen copyrighted information for the purpose of training their AI models. This leads to AI repeating copyrighted information without citing where it got the information from. Plaintiffs argue that this is copyright infringement because the AI models are reproducing, summarizing, or generating content that is similar or the same as the original copyrighted works without authorization or compensation from the original owner.
In September of 2025 a similar case, Bartz vs Anthropic, reached a $1.5 billion settlement. In this case a group of authors sued AI company Anthropic for training its models on nearly half a million pirated books. This lawsuit sent a signal to AI companies about how clear copyright infringement will be treated in the courts.
The United States Copyright Office and some recent court rulings have found that lawfully obtained copyrighted works may be used to train AI and can be considered transformative fair use. As more of these cases develop, it will be important to see what instances are considered fair use and when copyrighted material is protected, so that companies can be sure they are legally creating AI, and not accidentally using copyrighted work when utilizing AI for their business.
A wave of lawsuits have been triggered by multiple companies' uses of third party AI systems. These systems often are paid for by a company to listen and record phone calls with clients then deliver analytics. However, if the client is not explicitly told that their conversation is being recorded by artificial intelligence, the company is at risk of a lawsuit.
In order to avoid this risk in your business it is important to implement strict AI policies. For example, some employees may use AI to record meetings and take notes for them without company knowledge. It is important for businesses to have strict policies of all use of AI so that employees do not act in a way that could bring legal issues. If a conversation is being recorded consent is required. Depending on the state, one party consent may be enough, but in others both participants in the conversation or phone call must consent in order to be recorded.
Hiring a third party AI system could also lead to issues with federal wiretapping laws. A third party secretly eavesdropping on calls or conversations may be considered criminal activity. In these instances your company could be liable for aiding and abetting.
While copyright and third party AI lawsuits pose the greatest interest to companies wondering how AI may impact them, many other lawsuits have been filed. These include lawsuits alleging discrimination under the Fair Housing Act, digital redlining for employment, wrongful arrests caused by AI facial recognition software, defamation, and lack of freedom of information. While artificial Intelligence is not new, its widespread use across industries still is. As these cases move through the courts new legal presidents will be set, gradually defining how AI will be interpreted and regulated by the judicial system.