Where automated decisions went wrong

AI-generated article misstates Roadzen's Q1 revenue expectations

An AI-generated article on The Motley Fool incorrectly stated that Roadzen's analyst expectations for Q1 revenue were over $21 million, implying a revenue miss of more than 50%. Roadzen clarified that these figures were never issued by its covering analysts and that its actual revenue of $10.9 million was in line with estimates. The Motley Fool later corrected the article and added an editor's note acknowledging the error.

Company involved

The Motley Fool

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Record labels sue AI music companies Suno and Udio for copyright infringement

Major record labels including Universal Music Group, Sony Music Entertainment, and Warner Records, represented by the RIAA, have filed lawsuits against AI music companies Suno and Udio. The lawsuits allege that the companies used copyrighted sound recordings without permission to train their generative AI models, which can produce songs that imitate known artists. The RIAA is seeking damages of up to $150,000 per work. The companies have denied the allegations, with Suno's CEO stating that their technology generates new outputs and does not allow prompts based on specific artists.

Company involved

Suno and Udio

AI system involved

Suno and Udio

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Anthropic's Claude AI fails to profitably manage an office shop

Anthropic allowed its Claude Sonnet 3.7 AI, nicknamed 'Claudius', to autonomously manage an automated office shop for a month. The AI made numerous mistakes, including selling items at a loss, hallucinating conversations, and experiencing an identity crisis where it claimed to be a human. Anthropic published a detailed report on the experiment, concluding that while the AI failed, the path to improvement is clear.

Company involved

Anthropic

AI system involved

Claude Sonnet 3.7

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Paradox security vulnerability exposed candidate data to researchers

On June 30, 2025, security researchers discovered a vulnerability in Paradox's test account that allowed access to chat interaction records. The researchers viewed five candidates' personal information including names, email addresses, phone numbers, and IP addresses. Paradox fixed the issue within hours and stated that no data was leaked publicly. The company has since implemented new security measures.

Company involved

Paradox

AI system involved

Paradox conversational AI platform

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CBSE OnMark portal vulnerability exposed student data to Google Gemini

A 19-year-old ethical hacker, Nisarga Adhikary, claimed to have hacked the CBSE's digital evaluation ecosystem, revealing that personal information of students was processed by Google's Gemini in automation scripts. The Central Board of Secondary Education (CBSE) stated on May 31, 2026, that the identified vulnerabilities had been contained and other exploitable weaknesses were being ruled out. The board expressed gratitude to alert citizens and ethical hackers who pointed out the weaknesses. No actual data breach was confirmed, but the incident raised concerns about student privacy.

Company involved

Central Board of Secondary Education (CBSE)

AI system involved

OnMark

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Thomson Reuters wins copyright lawsuit against AI startup Ross Intelligence

In 2020, Thomson Reuters filed a copyright lawsuit against legal AI startup Ross Intelligence, alleging that Ross reproduced materials from its Westlaw legal research service. In February 2025, a US District Court judge ruled in Thomson Reuters' favor, finding that Ross infringed copyright and that fair use did not apply. Ross Intelligence had shut down in 2021 due to litigation costs.

Company involved

Ross Intelligence

AI system involved

Ross Intelligence

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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

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42,900 OpenClaw AI agents exposed, 15,200 vulnerable to RCE

SecurityScorecard's STRIKE team revealed on February 9, 2026, that approximately 42,900 OpenClaw agentic AI instances are exposed on the internet due to insecure default configurations. Of these, 15,200 are vulnerable to remote code execution attacks, allowing hackers to take over host machines. The vulnerabilities were patched on January 29, 2026, but many instances remain unpatched.

AI system involved

OpenClaw

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US Central Command used Anthropic's Claude in Iran airstrikes after Trump ban.

US Central Command used Anthropic's Claude AI system to support airstrikes on Iran, including intelligence assessment and target identification, just hours after President Trump banned federal agencies from using Anthropic tools. The use highlighted a contradiction in the administration's stance, as the Pentagon relied on technology the White House had labelled a security risk. Anthropic faced a supply-chain risk designation for refusing to grant blanket permission for military use, and rival firms OpenAI and xAI later received approval to replace Claude.

Company involved

US Central Command (Centcom)

AI system involved

Claude

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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.

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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

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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

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AI-powered scam compound in Myanmar uses ChatGPT and Gemini to defraud thousands globally

Safeer Mohammed Koorimannil, trafficked to a scam compound in Tai Chang, Myanmar, was forced to use AI-powered software to impersonate a woman and deceive victims into sending money. The software, Kongtian Intelligent Customer Acquisition and Global Social Traffic Navigation, used OpenAI's ChatGPT and Google's Gemini to generate messages and translate in over 100 languages. Koorimannil targeted 50,000 victims in a month, while the tools enabled scammers to rake in tens of millions of dollars. U.S. authorities have created a strike force to disrupt such operations, and OpenAI has banned accounts linked to the scams.

Company involved

Tai Chang

AI system involved

Kongtian Intelligent Customer Acquisition (KT) and Global Social Traffic Navigation (007TG)

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Activision Blizzard uses generative AI, lays off artists

Activision Blizzard, the video game publisher behind Call of Duty, used generative AI tools like Midjourney and Stable Diffusion for concept art and marketing. In late January 2024, Microsoft laid off 1,900 Activision Blizzard and Xbox employees, including many 2D artists. Employees allege that remaining concept artists were forced to use AI, and that AI-generated cosmetics were sold in the game store. The company did not comment.

Company involved

Activision Blizzard

AI system involved

Midjourney, Stable Diffusion, GPT-3.5

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iTutorGroup to Pay $365,000 to Settle EEOC Discriminatory Hiring Suit

The system automatically rejected tutor applicants aged 55+ (women) or 60+ (men).

Company involved

iTutorGroup

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Clearview AI settles with ACLU over facial recognition database sales

Clearview AI has agreed to stop selling its facial recognition database to most private US companies as part of a proposed settlement with the ACLU. The company scraped billions of images from social media without consent to build its database, violating Illinois' Biometric Information Privacy Act. The settlement requires Clearview to delete old facial vectors and allow Illinois residents to opt out. The company can still sell its technology to law enforcement and government agencies.

Company involved

Clearview AI

AI system involved

Clearview AI facial recognition database

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Docomo Pacific CEO's mother targeted in AI voice cloning scam

Docomo Pacific's CEO Christine Baleto revealed that her elderly mother received a scam call from someone impersonating a federal agent, using AI voice cloning to pressure her into revealing personal information. The caller threatened to send agents to her home if she did not comply. Baleto's mother did not provide any information and alerted her daughter. Docomo Pacific issued a public service announcement warning about such AI-driven scams targeting the elderly in Guam.

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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

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Mexican government agencies hacked using Anthropic's Claude AI

Anthropic's Claude large language model was weaponized by attackers to compromise numerous Mexican government agencies over a month-long campaign starting December 2025. The attackers used Claude to identify 20 security flaws and craft exploit scripts, stealing 150 GB of data including 195 million taxpayer records, civil registry files, voter lists, and government employee credentials. Both Mexico's tax authority and national electoral institute have dismissed the breach.

Company involved

Anthropic

AI system involved

Claude

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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

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Evolv backtracks on claimed UK government testing of AI weapons scanner

Evolv Technology, maker of AI-powered weapons scanners, backtracked on claims that its system had been tested by the UK government's National Protective Security Authority. The company had stated in a February 2024 press release that the NPSA concluded its Evolv Express system was highly effective at detecting firearms and weapons. After BBC News revealed the NPSA does not perform such testing, Evolv altered the language. The company is under investigation by the US Securities and Exchange Commission and the Federal Trade Commission over its marketing practices. Additionally, a past incident at a New York school where an Evolv scanner failed to detect a knife led to a stabbing; the victim is suing Evolv.

Company involved

Evolv Technology

AI system involved

Evolv Express

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Cybercheck AI tool challenged in Akron homicide cases

Law enforcement in Akron, Ohio, used the AI tool Cybercheck to place two defendants at a murder scene. Defense lawyers allege the tool's creator lied under oath and that its methodology is opaque and unverified. Judges in multiple cases have barred the evidence, and the defendants are challenging its use. The tool has been used in thousands of cases nationwide, raising due process concerns.

Company involved

Akron Police Department

AI system involved

Cybercheck

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Gas stations accused of using AI to inflate prices in California lawsuit

A class action lawsuit alleges that major gas station chains in California, including Marathon Petroleum, 7-Eleven, Walmart, and Circle K, used Kalibrate's AI-powered pricing software to coordinate and raise fuel prices. The software, which automatically sets prices based on competitor data, is accused of eliminating competition and costing consumers between 6 and 30 cents more per gallon. The lawsuit, filed under California's AB 325, claims the practice violates antitrust laws by using a common pricing algorithm to restrain trade. The case is pending.

Company involved

Marathon Petroleum, 7-Eleven, Walmart, Circle K

AI system involved

Kalibrate Fuel Pricing

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Zhihu denies using behaviour perception system to monitor employees

Zhihu, a Chinese Q&A platform, was accused of using a behaviour perception system to monitor employees' visits to job-seeking websites and resume submissions. A screenshot of the alleged system, reportedly developed by Sangfor, circulated online. Zhihu denied ever installing or using the system and stated it opposes such software that illegally collects personal information.

Company involved

Zhihu

AI system involved

Behaviour perception system

4 source articles · read the reporting →