Adding a legal perspective since this came up:
The current legal landscape:
There’s no established legal framework for holding AI companies liable for hallucinations. We’ve researched this extensively. While defamation and false advertising laws exist, applying them to AI-generated content is legally murky.
That said:
Some companies are exploring claims around tortious interference (when AI hallucinations demonstrably cause lost deals) and violations of state consumer protection laws. But these are untested theories.
Practical advice:
Document everything. If a prospect explicitly tells you they rejected your product based on AI misinformation, get that in writing. If this ever becomes actionable, you’ll want evidence of actual damages.
For now, the most effective remedy is proactive content strategy rather than legal action.