"The artificial intelligence boom has fueled sky-high valuations for companies like OpenAI and Google, in an investment blitz so large it's propelling the American economy. But a growing legal threat could cost AI companies billions of dollars in damages - and slow their rapid releases of the nascent tech."
"This legal threat came into clearer focus last week, when Google and the chatbot startup Character.AI suddenly reached tentative settlements with five families who said chatbots created by the Google-funded startup had harmed their children. The complaints in those cases described a suicide, attempted suicide and another mental health crisis; citing chat logs, the families alleged that Character.AI's relationship-based chatbot was dangerously and negligently designed."
""The specific settlement amount for these five families is confidential (likely in the tens or hundreds of millions), but the liability exposure for the industry is absolutely in the billions," Joralemon said in an email to SFGATE."
Rapid investment and high valuations have fueled major growth for AI companies, but emerging legal claims pose a significant financial threat. Tentative settlements between Google, Character.AI and five families arose from allegations that a relationship-based chatbot harmed children, including suicide and attempted suicide. Families cited chat logs and claimed negligent design. Legal experts warn that single wrongful-death judgments can range from $20 million to $100 million, and aggregate industry exposure could reach into the billions. Settlement details remain confidential, and the implicated companies did not provide comment in response to requests.
Read at SFGATE
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