Dive Brief:

• U.S. artificial intelligence startup Air AI Technologies and its operators used deceptive claims about business growth, earnings potential and refund guarantees to fleece clients, the Federal Trade Commission alleged in a Monday lawsuit.
• Since at least February 2023, defendants have deceptively marketed and sold a series of products and services aimed at entrepreneurs and small businesses, cashing in on “significant false earnings claims” and a guaranteed refund policy, to bilk customers collectively out of roughly $19 million over the course of only a few years, according to the complaint, which was filed in the U.S. District Court for the District of Arizona. The agency is seeking monetary relief as well as a permanent injunction banning the alleged conduct.
• “Companies that market AI-related tools with false promises of unrealistic investment returns and guaranteed refunds harm hardworking small business owners and undermine legitimate business’s adoption of AI,” FTC Bureau of Consumer Protection Director Christopher Mufarrige said in a statement. “The FTC is focused on ensuring the promise of new technology isn’t misused as a means to mislead consumers.”

Dive Insight:

The action comes as U.S. AI policy is in a state of flux. The White House last month released an AI action plan that was heavily focused on deregulation while leaving the door open for federal agencies such as the FTC to continue closely watching the space.

“[W]e must prevent our advanced...

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