Eight legal questions for your AI company

The success of AI ventures is increasingly dependent on their legal readiness, entailing thorough documentation and answers across several critical areas.
U.S. regulations for AI remain decentralized, involving both federal laws and specific guidance from agencies like the FTC, SEC, and EEOC, alongside individual state laws, such as those in California, Colorado, and New York.
Legal challenges include determining lawful rights to data used in training and serving AI models, managing copyright risks from AI-generated outputs, ensuring compliance with license terms governing models, and assessing ownership and protection of AI outputs.
Due diligence and comprehensive documentation are essential for securing funding and sales, with an “AI-governance binder” being particularly valuable.
AI security requires robust defenses against various attack vectors including prompt injection, data poisoning, and model extraction, adhering to recognized cybersecurity frameworks.
Compliance with evolving laws regulating synthetic media and deepfakes, such as Tennessee’s ELVIS Act and California’s regulations on digital replicas, is critical.
It is paramount to avoid “AI washing”—exaggerating or misrepresenting the AI capabilities in products and services—due to heightened regulatory scrutiny by the SEC, FTC, and other agencies.

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