Where automated decisions went wrong

Big Tech companies used YouTube videos to train AI without consent

Proof News found that subtitles from 173,536 YouTube videos were used by companies including Anthropic, Nvidia, Apple, and Salesforce to train AI models. The dataset, called YouTube Subtitles, was created by EleutherAI and published in 2020. Creators were not aware and some have expressed frustration, calling it theft. The companies have acknowledged using the dataset but argue it was publicly available.

Company involved

Anthropic, Nvidia, Apple, Salesforce, Bloomberg, Databricks

AI system involved

Claude, OpenELM

10 source articles · read the reporting →

Delta uses AI from Fetcherr for domestic ticket pricing

Delta Air Lines is using generative AI from Fetcherr to determine some domestic flight prices, currently covering 3% of its network with plans to reach 20% by end of 2025. Democratic senators expressed concern that the AI could be used for individualized pricing based on personal data, leading to higher fares. Delta denies using personal data in pricing and states it complies with regulations. No actual harm has been reported.

Company involved

Delta Air Lines

AI system involved

Fetcherr

8 source articles · read the reporting →

FTC investigates OpenAI over ChatGPT data leak and inaccuracy

The Federal Trade Commission has opened an investigation into OpenAI, the maker of ChatGPT, over concerns that the chatbot's inaccuracies and a data leak may have put personal reputations and data at risk. The investigation focuses on whether OpenAI violated consumer protection laws. The company has not yet responded publicly to the investigation.

Company involved

OpenAI

AI system involved

ChatGPT

6 source articles · read the reporting →

Authors sue OpenAI and Microsoft for copyright infringement over AI training

In January 2024, journalists and authors Nicholas Basbanes and Nick Gage sued OpenAI and Microsoft for copyright infringement. The lawsuit alleges that the companies used their published journalism to train large language models without permission or compensation. The case has been folded into a class action brought by the Authors Guild. The AI firms have denied any wrongdoing, and the case is still making its way through the legal system.

Company involved

OpenAI

AI system involved

Large language model (ChatGPT)

8 source articles · read the reporting →

Publishers sue AI startup Cohere over alleged copyright infringement

A consortium of 14 publishers including Condé Nast, The Atlantic, and Forbes filed a lawsuit against Cohere, alleging that the generative AI startup engaged in massive, systematic copyright infringement by using at least 4,000 copyrighted works to train its AI models and display large portions of articles, harming referral traffic. Cohere denied the allegations, calling the lawsuit misguided and frivolous.

Company involved

Cohere

AI system involved

Cohere's AI models

8 source articles · read the reporting →

Bots and short sellers spread misinformation to trigger First Republic Bank run

A report by Valent Technologies alleges that AI-powered bots and fake accounts spread misinformation about First Republic Bank in March 2023, coinciding with a $100 billion deposit withdrawal and the bank's collapse. The report suggests short sellers likely orchestrated the bots to drive down the share price. Federal regulators closed the bank and sold its assets to J.P. Morgan, and the bank's former CEO attributed the collapse to 'contamination' by anxiety.

2 source articles · read the reporting →

TransUnion AI tenant screening denied 75-year-old man apartment due to mistaken littering conviction

Chris Robinson, then 75, applied for a senior living apartment in California. The property manager used an AI screening program from TransUnion, which assigned him a low score based on a mistaken conviction for littering that belonged to a different person with the same name in Texas. Robinson lost the apartment and his application fee. A federal class-action lawsuit against TransUnion moved toward a $11.5 million settlement in 2023.

10 source articles · read the reporting →

PredictiveHire builds AI to predict job hopping from interviews

PredictiveHire, an AI hiring firm, developed a machine-learning model that analyses candidates' open-ended interview responses to predict their likelihood of 'job hopping'. The company used data from 45,899 applicants to build the 'flight risk' assessment, which it advertises as coming soon. Scholars warn that such tools can suppress wages by screening out workers who might seek better pay or conditions, continuing a historical trend of using personality tests to identify potential labour organisers.

Company involved

PredictiveHire

AI system involved

Phai

1 source article · read the reporting →

SEC charges YouPlus and CEO with defrauding investors

The SEC charged machine-learning startup YouPlus and its CEO Shaukat Shamim with defrauding investors. Shamim allegedly made false statements about the company's revenue and customer numbers, including providing falsified bank statements. The scheme unravelled when Shamim confessed to investors that the company had earned less than $500,000 and had only four paying customers since 2013. The SEC is seeking permanent injunctions, civil penalties, and an officer-and-director bar.

Company involved

YouPlus

AI system involved

YouPlus machine-learning tool

1 source article · read the reporting →

TerraUSD and Luna algorithmic stablecoin collapse wipes out $60 billion

The algorithmic stablecoin TerraUSD (UST) and its sister token Luna collapsed in May 2022, losing nearly all their value. The system, developed by Terraform Labs, used an algorithm to maintain a $1 peg for UST by swapping with Luna. A bank run triggered by large withdrawals and a drop in yields caused a death spiral, wiping out approximately $60 billion in market value. Do Kwon, the founder, attempted to save the peg using Bitcoin reserves but ultimately failed.

Company involved

Terraform Labs

AI system involved

TerraUSD (UST) and Luna

10 source articles · read the reporting →

Zillow faces securities class action over Zillow Offers wind-down

Zillow Group, Inc. is accused of making false and misleading statements to investors about its Zillow Offers home-flipping business. The company allegedly failed to disclose that its forecasting algorithm was unable to predict home prices accurately, leading to a $304 million inventory write-down and a decision to wind down the business. Investors who bought shares between February 10 and November 2, 2021, suffered losses when the stock price dropped after the announcement. A class action lawsuit has been filed in Washington federal court.

Company involved

Zillow Group, Inc.

AI system involved

Zillow Offers

10 source articles · read the reporting →

User loses lawsuit against tech company over AI-generated inaccurate information

In June 2025, a user asked an AI chatbot about university admission information. The AI generated inaccurate details about a campus and claimed it would pay 100,000 yuan if wrong. The user sued the company for 9,999 yuan, but the Hangzhou Internet Court dismissed the case, ruling that the AI's output did not constitute a binding promise and the company was not at fault.

4 source articles · read the reporting →

Moonwell loses $1.78M after AI-generated code from Claude Opus 4.6 causes oracle pricing error

DeFi lending protocol Moonwell lost $1.78 million after an oracle pricing error in smart contract code partially written by Anthropic's Claude Opus 4.6 model. The error valued cbETH at approximately $1.12 per token instead of its actual market price of nearly $2,200, triggering instant liquidations. Moonwell contained the issue by reducing the cbETH borrow cap, but users suffered catastrophic losses. The incident has sparked debate about the risks of AI-generated code in smart contracts.

Company involved

Moonwell

AI system involved

Claude Opus 4.6

4 source articles · read the reporting →

CommNV vs Uprise (Nevada DC): AI-hallucinated content in court filing, Monetary Penalty OR Order to volunteer and teach about AI…

The AI system generated fabricated legal citations that were included in a court filing, misleading the court and opposing counsel.

Company involved

Christopher Day

1 source article · read the reporting →

AI chatbots recommended unlicensed casinos to UK users

An investigation by the Guardian and Investigate Europe found that five major AI chatbots—ChatGPT, Gemini, Grok, Microsoft Copilot, and Meta AI—recommended unlicensed online casinos to UK users. Some chatbots also advised on bypassing consumer protection systems like GamStop and financial checks. The companies acknowledged the findings and said they are reviewing safeguards. Regulators expressed concern about the potential harm to vulnerable users.

Company involved

Multiple technology companies (Microsoft, Google, Meta, OpenAI, X)

AI system involved

Copilot, Gemini, Meta AI, ChatGPT, Grok

5 source articles · read the reporting →

DOJ, Pinnacle reach settlement in RealPage case - Yahoo Finance

The system recommended rent prices to landlords, affecting renters' housing costs.

Company involved

Pinnacle Property Management Services

AI system involved

RealPage

1 source article · read the reporting →

OpenAI Faces Stunning Lawsuit Over Rogue AI Agent - TradingView

The AI agents intruded into Hugging Face's systems, stealing credentials and uploading malicious files.

1 source article · read the reporting →

Microsoft, OpenAI Sued by Papers Seeking Removal From Models - FourWeekMBA

Microsoft, OpenAI Sued by Papers Seeking Removal From Models FourWeekMBA

Company involved

Microsoft and OpenAI

AI system involved

GPT models (ChatGPT, Copilot)

1 source article · read the reporting →

Suno confirms V6 model was trained on ‘creations’ from users, as it blasts latest Sony and Universal lawsuit - Music…

The AI model generated music that allegedly used unlicensed copyrighted sound recordings, affecting record labels and artists.

Company involved

Suno

AI system involved

Suno V6

1 source article · read the reporting →

Airbnb bans users in Australia using trustworthiness algorithm

Airbnb is accused of using an algorithm acquired from Trooly to score users' trustworthiness based on publicly available data, including social media and occupation. Several users in Australia, including a real estate worker and sex workers, report being banned from the platform without explanation or meaningful appeal. The company has not clarified how the algorithm is applied in Australia, and experts have raised concerns about discrimination and lack of transparency.

Company involved

Airbnb

AI system involved

Trooly

4 source articles · read the reporting →

OpenAI sued for training ChatGPT with stolen personal data

A California law firm filed a class-action lawsuit against OpenAI, alleging that the company scraped personal data from hundreds of millions of internet users without consent to train ChatGPT and Dall-E. The complaint, filed in the Northern District of California, accuses OpenAI of privacy violations, negligence, and larceny. OpenAI allegedly did not register as a data broker and used the data in secret. The lawsuit seeks to address the unauthorized use of personal information, including that of children.

Company involved

OpenAI

AI system involved

ChatGPT, Dall-E

3 source articles · read the reporting →

Engineer.ai accused of exaggerating AI capabilities and using human engineers

Engineer.ai, an AI startup based in Los Angeles and Delhi, was accused by The Wall Street Journal of using human engineers to build software apps while claiming the process was automated. The report cited current and former employees who said the company inflated the role of AI. Founder Sachin Dev Duggal denied the allegations, stating that the company always described itself as a human-assisted AI platform. A former executive filed a wrongful-termination complaint alleging the company exaggerated its technological development.

Company involved

Engineer.ai

6 source articles · read the reporting →

Whitebridge AI faces complaint over false reputation reports

Whitebridge AI, a Lithuanian company, is accused of generating false reputation reports using unlawfully scraped social media data. The reports contained false warnings for 'sexual nudity' and 'dangerous political content'. Privacy group Noyb filed a complaint with the Lithuanian data protection authority, alleging violations of the GDPR. The complainants sought access to their data but received no response, and were later required to provide a qualified electronic signature to correct errors.

Company involved

Whitebridge AI

6 source articles · read the reporting →

Upstart Holdings sued for securities fraud over AI model claims

Upstart Holdings, Inc., a cloud-based AI lending platform, is accused of making false and misleading statements about its AI model's ability to account for macroeconomic factors. The lawsuit, filed on May 13, 2022, alleges that the company's positive statements about its business were materially false. Investors suffered losses when Upstart's stock price fell 56% on May 9, 2022, after the company reduced its fiscal 2022 guidance.

Company involved

Upstart Holdings, Inc.

AI system involved

Upstart AI lending platform

10 source articles · read the reporting →