SEC Cracks Down on Companies Making False AI Claims to Boost Stock Prices

The SEC is cracking down on "AI washing," when companies falsely claim to use AI technology. It recently fined two investment advisors for making misleading claims about using AI.

SEC Chair Gary Gensler posted a warning video calling out companies that lie about their AI capabilities to boost stock prices or impress investors.

The SEC settled charges with Delphia and Global Predictions, fining them $400K total for claiming to use AI when they did not actually have AI technology.

The SEC alleges that crypto fund manager Brian Sewell raised $1.2 million claiming AI and machine learning capabilities that did not really exist.

With over 350K .ai domains registered, the SEC aims to target clear lies about AI capabilities that can be proven false in court.