The use of artificial intelligence (AI) is booming. Investors and companies are pouring cash into the space, and particularly into generative AI (GAI), to seize their share of the market which McKinsey reports could add up to $4.4 trillion annually to the global economy. Some companies are investing tens or hundreds of millions of dollars or more into GAI. Whether companies are building their own AI technology and training their own AI models, or leveraging third party tools, there are significant legal issues and business risks that directors need to consider as part of their fiduciary obligations and corporate governance. Five of the top issues to understand and consider are addressed in this article. Many other issues can arise. A wave of litigations and enforcement actions has swelled. Boards should get educated on these issues and ensure appropriate policies and corporate governance are implemented to manage the business and legal risks.Continue Reading 5 Things Corporate Boards Need to Know About Generative AI Risk Management
Jim Gatto is a partner in the Intellectual Property Practice Group in the firm’s Washington, D.C. office. He is Co-Leader of the Artificial Intelligence Team, the Blockchain & Fintech Team, and Leader of the Open Source Team.
A new bill, the Token Taxonomy Act was introduced to congress to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security, to direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, to adjust taxation of virtual currencies held in individual retirement accounts, to create a tax exemption for exchanges of one virtual currency for another, to create a de minimis exemption from taxation for gains realized from the sale or exchange of virtual currency for other than cash, and for other purposes.
Continue Reading New Effort to Exempt Crypto Currency from Certain SEC, Tax and Other Regulatory Burdens
The SEC has opined that, depending on the facts and circumstances of each individual ICO, the virtual coins or tokens that are offered or sold may be securities. If they are securities, the offer and sale of these virtual coins or tokens in an ICO are subject to the federal securities laws.
Continue Reading SEC Declares That Initial Coin Offerings (ICOs) May Be Securities; Finds DAO a Security