AI And Data Security In The News (But Not In The News)

It is impossible for me to read the news and case law without thinking about how AI and Data Security issues impact today and the future. Here are some examples:

Celsius Earnings Snafu: The company inadvertently had the information and press release publicly available before it planned to announce its earnings. Hedge funds and trading firms were already scouring the internet for every possible piece of information. Their use of AI will only be increasing.

In addition, it is easy to foresee future securities fraud cases where someone “accidentally” places earnings information online after making trades to take advantage of when the “accidental” release is made public. Employee oversight–in and out of the office–will be taken to new levels.

Celsius Snafu Gave a Sneak-Peek to Rally-Fueling Earnings Report | Financial Post

Crime-Fraud Exception: A recently issued Illinois case held the attorney-client privilege protecting documents and information may be breached if an attorney assists a client breach its fiduciary duties, tortiously interfere with business relationships, defamation, or engage in other acts “akin to fraud”. While this exception will presumably not apply every time an attorney advises a client on defamation issues, AI raises the damages in these cases because the alleged defamatory statements will presumably be made available through AI through hallucination or proper context.

I predict attorneys, PR firms, and other advisors will be sued more often in defamation cases when giving advice about whether to publish certain information that will be gobbled up and spread by AI.

Local Education Issues: School districts are increasingly using companies like InnovateK12 to analyze current stakeholder priorities and trends to assist school boards in their decision making. In particular, (1) school districts can now analyze the information gathered from all stakeholders in a manner that had been time consuming and too expensive for their budgets; and (2) school districts–who are notorious for not managing their expenditures and inventory–can make better financial decisions to save taxpayer money.

Put a little differently, AI will now be playing a greater role in procurement decisions. Companies whose contracts have not been scrutinized for years (or decades) need to be proactive so they can defend their past pricing models. Ironically, AI will be useful in researching the past.

David Seidman is the principal and founder of Seidman Law Group, LLC.  He serves as outside general counsel for companies, which requires him to consider a diverse range of corporate, dispute resolution and avoidance, contract drafting and negotiation, and other issues. He can be reached at or 312-399-7390.

This blog post is not legal advice.  Please consult an experienced attorney to assist with your legal issues.


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