10 Potential Claims in Artificial Intelligence Litigation: When Can (And Should) You Sue?
Learn About Some of the Most Common Types of Artificial Intelligence Litigation Heading Into 2026
Artificial Intelligence Team Lead
Contact NickAs the popularity of artificial intelligence (AI) continues to grow, so does the volume of AI-related litigation. We are seeing numerous AI-related lawsuits being filed—with the novelty of plaintiffs’ allegations rivalling the novelty of artificial intelligence itself in many cases.
So, when can (and should) you file an AI-related lawsuit? Artificial intelligence litigation can take many different forms, and within a single lawsuit, a plaintiff may be able to file multiple claims against multiple AI companies. The key is making informed and strategic decisions and ensuring you use the litigation process efficiently and effectively. When plaintiffs go to district court without valid claims to pursue, not only can they (and their legal counsel) face sharp rebukes from the bench, but defendants may choose to litigate to establish a defense-friendly precedent for the future.
With this in mind, here are 10 examples of potential grounds for AI-related lawsuits:
1. Intellectual Property (IP) Infringement
A substantial amount of AI-related litigation has involved direct copyright infringement allegations. Direct infringement claims include, but are not limited to, copyright infringement claims involving generative AI. Along with these claims, as more companies develop and launch AI platforms, we expect to substantially increase vicarious copyright infringement and patent infringement litigation between market competitors.
2. Breach of Contract
Companies and consumers can potentially pursue AI-related litigation involving breach of contract claims. Artificial intelligence developers must carefully craft their AI license agreements to include appropriate rights and protections. However, in many cases, developers rely on form license agreements and generic license terms that are not well-suited to the unique nature of generative AI models. As a result, plaintiffs have opportunities to pursue contract-based claims in many cases. These include (but are not limited to) claims alleging breaches of representations and warranties and contractual liability for flawed AI technology outputs.
3. Fraudulent Inducement
While many companies are heavily promoting the capabilities of their AI platforms, some of these companies are ultimately failing to deliver. When a company overpromises and underdelivers, this can potentially justify a claim for fraudulent inducement. Fraudulent inducement claims involve allegations that a company made false or misleading representations to secure a contract.
4. Business Loss
Companies that suffer business losses due to relying on third-party AI platforms (or third parties’ promises about their AI platforms’ capabilities) may be able to pursue contract-based claims, fraudulent inducement claims, negligence claims, or claims based on various other grounds. While business losses do not justify lawsuits against vendors in all (or even most) cases, there are circumstances in which vendors—including AI licensors—can be held accountable for causing their clients’ or customers’ losses.
5. Indemnification Liability
When companies get sued based on their use of licensed AI platforms, they can often bring their licensors into litigation by filing claims for indemnification. Indemnification clauses in contracts (including AI licenses) are intended to apply precisely in this scenario. Of course, this means that the license agreement terms are key, and licensors’ form license agreements will include extremely limited indemnification rights, if they include any indemnification rights at all, in most cases. As a result, in this scenario, carefully reviewing the relevant license term is a key first step toward determining what options are available.
6. Privacy and Data Security Violations
Privacy and data security violations have also proven to be common grounds for AI-related lawsuits. Like all companies, AI developers have a duty to comply with all applicable privacy and data security laws and regulations. While most large companies devote the necessary resources to compliance with privacy and data security, many AI startups and smaller companies do not. Additionally, even with compliant privacy and data security protocols, breaches still can—and do—happen.
These claims are particularly common in cases involving AI technologies used in healthcare, human resources (HR), and consumer-oriented AI products and services. While it may not be financially viable for an individual patient, employee, or consumer to file a lawsuit, privacy and data security violations can be fertile grounds for class action and mass tort lawsuits in many cases.
7. Discrimination
One of the primary social concerns linked to the rise of artificial intelligence is inherent bias within AI algorithms. Biased AI decision-making can justify discrimination claims in many cases—particularly in the employment, patient care, financing, and housing sectors. Reliance on technology (including artificial intelligence) is not a defense against liability for discrimination and unfair competition. As a result, both AI developers and companies that use flawed AI platforms can potentially face liability in these types of cases.
8. Fraud
Along with fraudulent inducement claims, generative AI licenses and other parties may also have grounds to pursue various other fraud-based claims. Some examples include:
- Investment fraud (if securities issuers misrepresent their AI platforms’ capabilities or if AI-based trading tools violate federal securities laws)
- Consumer fraud (if companies misrepresent their AI platforms’ capabilities on social media or in other marketing materials)
- Healthcare fraud (if healthcare providers’ reliance on AI tools leads to the provision of unnecessary medical care or improper billing)
Again, these are just examples of several possibilities. In many cases, companies are adopting AI tools without a clear and comprehensive understanding of their limitations—and, in doing so, they are exposing themselves to a wide variety of potential claims.
9. Personal Injury or Wrongful Death
From flawed autonomous vehicle technology to flawed AI-powered robotic surgery devices, we have already seen an extremely wide range of personal injury and wrongful death claims involving AI technologies. While this is unfortunate, it has also been inevitable since the earliest days of AI development. Here, too, reliance on technology is not a defense to liability, so victims and their families will often have strong claims for liability.
10. Property Damage or Casualty
Along with personal injury and wrongful death claims, we are also seeing a significant number of AI-related property damage and casualty claims. This includes claims involving accidents caused by AI-powered vehicles and other products and claims involving insurance companies’ use of AI-powered models to justify coverage denials. Like all of the other potential claims discussed above, these claims are extremely complicated, and this means that individuals and companies considering legal action should consult with an experienced AI litigation attorney promptly.
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So, you are thinking about filing an AI-related lawsuit. How can you make an informed decision about if (and when) to move forward? Here are some of the key steps involved:
- Evaluating Potential Claims – The first step is to evaluate all potential claims. Regardless of the circumstances, litigating an AI dispute will require a substantial investment of time and resources (whether by you, your company, or your law firm). As a result, it is critical to ensure that you accurately understand your (or your company’s) legal rights and the available remedies.
- Assessing the Likelihood of Success – After identifying any and all viable claims, one of the next critical steps is to assess your (or your company’s) likelihood of success. Even if a claim is viable, success is not guaranteed, and if a claim involves novel legal or factual issues related to AI, the outcome may be even more uncertain. As a result, realistically assessing the likelihood of securing a favorable verdict is essential.
- Calculating Potential Damages – Even if an AI-related lawsuit has a reasonable chance of success, it won’t be worth pursuing if the available damages (or other applicable remedies) are limited. Thus, calculating your (or your company’s) potential damages and/or evaluating other potential remedies is also a key early step.
- Determining if a Mandatory ADR Clause Applies – Since many AI-related disputes involve an underlying software license or other contract, many are subject to mandatory alternative dispute resolution (ADR) clauses. If a mandatory ADR clause applies, you may need to pursue mediation or arbitration rather than filing an AI-related lawsuit in court.
- Considering the Viability (and Benefits) of Settlement – Finally, before plaintiffs filed a lawsuit or ADR, it will be worth considering the viability (and benefits) of attempting to settle before taking formal legal action. If you (or your company) can achieve a favorable result without incurring dispute resolution costs, this could be the best path forward.
Speak with an AI Litigation Attorney at Oberheiden P.C.
Do you have questions about pursuing an AI-related lawsuit? If so, we can help, and we invite you to get in touch. To speak with a senior AI litigation attorney at Oberheiden P.C. in confidence, give us a call at 888-680-1745 or tell us how we can help online today.
