Orrick’s review of SEC comments on AI-related disclosures in SEC filings through October 2024 revealed the following trends:
- More than 60% of SEC comments requested clarification of how AI is or is intended to be used in disclosed AI-related initiatives, projects, or technologies.
- 30% of SEC comments addressed allegedly unsupported or unqualified statements about AI prospects.
- 17% of SEC comments addressed companies’ use of AI-related terminology and definitions.
- 10% of SEC comments addressed companies’ materiality assessments and determinations.
- 34% of SEC comments addressed other issues such as IP, the collection and use of data implicated in AI applications, third party involvement, AI development, model validation, and disclosure inconsistencies.
Additional explanation and sample comments accompany each area of SEC focus.