Alerts10.22.25
New Federal Legislation Proposes Product Liability Standards for AI Systems
Highlights
- Broad Definition of Covered AI Products. The AI LEAD Act would define “Artificial Intelligence Systems” as software, tools, or applications that use algorithms or machine learning to make or assist in decisions — whether standalone or built into larger systems.
- Potential Developer and Deployer Liability. Developers could face claims for defective design, failure to warn, breach of express warranty, and strict liability. Deployers may be liable for unauthorized modifications or misuse but can seek dismissal if the developer is available and solvent.
- A Federal Cause of Action. The bill creates a federal right of action for individuals, state attorneys general, and the U.S. Attorney General, with a four-year statute of limitations and additional protections for minors.
- Retroactive Reach. The legislation would apply to suits filed after enactment, even if the alleged harm occurred beforehand — raising potential due process and fairness concerns.
The Senate recently received S.2937, the AI LEAD Act (Aligning Incentives for Leadership, Excellence, and Advancement in Development Act) introduced on Sept. 29, 2025 by Sens. Dick Durbin (Ill.) and Josh Hawley (Mo.). The Act seeks to establish federal product liability standards tailored to artificial intelligence technologies.
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