Potential AI lawsuits worry business leaders; leading AI super PACs go dark

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Sam Sutton (0:34)

Hello, and welcome to Decoded by POLITICO. I'm Sam Sutton.

Brendan Bordelon (0:37)

And I'm Brendan Bordelon. Today on the show, we'll discuss how businesses are risking lawsuits by integrating AI with little oversight and how their lobbyists are struggling to convince lawmakers to focus on enterprise AI risks. Plus, some of the biggest AI super PACs have gone dark in the weeks leading up to the midterms, reporting little to no spending with the Federal Election Commission in the crucial first weeks of October. What's behind their shifting strategies?

So Sam, you and I have been reporting on how companies across the economy have been working to integrate AI despite very few specific regulatory standards for how these companies should use this technology and crucially, how they can avoid getting sued. Can you talk a little bit about that?

Sam Sutton (1:18)

Absolutely. So I think that there are two kind of competing forces at play here. On the one hand, CEOs, business leaders are really under pressure to adopt AI, use AI, bring products to market that are customer facing, that are AI integrated. But that's happening at a time when there are not really rules in place that are specific to AI when it comes to how you integrate it into your operations or how you introduce a chat bot to your customers. And so liability risks are definitely climbing in that backdrop, and companies to a certain extent are looking to regulators or to policymakers for clarity.

There hasn't been a great deal of guidance from the federal government on this, and to the extent it's even being regulated at all, it's largely happening at the state level. Now, I've been talking to folks in the business world about this. It sounds like you've been talking to a lot of folks who are on Capitol Hill or are running state-level lobbying operations. What are you hearing from them on this?

Brendan Bordelon (2:15)

Yeah. So the point you made about risks is well taken, and I think industry writ large is getting worried about integrating particularly AI agents into these crucial choke points for people operating in housing or financing, often like HR situations where AI could be used to determine whether you get a job or not. There are not a lot of rules, as you said, and I think there are a lot of businesses that are worried that, hey, if we use an AI bot in a way that might harm someone, deny them a job unjustly or deny them access to credit or housing, we could end up in a world of legal pain.

So lobbyists are going to the Hill, they're going to state legislatures across the country, and they're saying, can you let us know how we should integrate this stuff to avoid legal liability, to make sure that we are keeping our customers safe, frankly, to make sure that we're keeping ourselves safe from lawsuits. I talked to Chandler Morse, who is the top lobbyist at HR Giant Workday, and what he told me was, it's been really hard to get lawmakers at any level to pay attention to this issue because everyone is so focused on the AI doomsday stuff, which is kind of funny because six months ago, lawmakers weren't really focused on that either. Now, the attention is all on the autonomous cyber attacks. Congress and a bunch of states are looking at, well, what can we do to regulate the frontier labs, make sure that they're developing this technology safely? And Morse told me, listen, that's important, that's good and all, but at the same time, we have businesses that are integrating all of these AI tools now, and they're not necessarily the super advanced, scary AI models that OpenAI or Anthropic are building, but they are very, very much a concern for the businesses and for the consumers that potentially could be harmed if one of these things goes wrong. So there's a lot of efforts by the lobbyists to say, hey, can you guys walk and chew gum at the same time here? We know you need to worry about frontier risk, but we also really need you to focus on enterprise risk. The other thing Morse told me was that states, to the extent they are working on this, some states have started to pass laws on AI transparency.