A UK High Court judge ruled Stability AI liable for trademark infringement after it spat out synthetic Getty watermarks. Getty called for tougher laws while Both sides now face a precedent that AI models can still trigger trademark penalties even when copyright claims fizzle.

Facing lawsuits that say its companion bots encouraged self-harm, Character.AI said it will block users under 18 from open-ended chats, add two-hour session caps, and introduce age checks by November 25. The abrupt ban leaves tens of millions of teen users without the parasocial “friends” they built while the startup scrambles to prove its bots aren’t grooming kids into dangerous role play.

An AI-based gun detection system at a Baltimore County high school flagged a student carrying a Doritos bag as armed, leading armed officers to handcuff and search the teen at gunpoint before realizing the system hallucinated the threat.

A BBC audit of 2,700 news questions asked in 14 languages found that Gemini, Copilot, ChatGPT, and Perplexity mangled 45% of the answers, usually by hallucinating facts or stripping out attribution. The consortium logged serious sourcing lapses in a third of responses, including 72% of Gemini replies, plus outdated or fabricated claims about public-policy news, reinforcing fears that AI assistants are siphoning audiences while distorting the journalism they quote.

Conservative organizer Robby Starbuck sued Google in Delaware, saying Gemini and Gemma kept spitting out fabricated claims that he was a child rapist, a shooter, and a Jan. 6 rioter even after two years of complaints and cease-and- desist letters. The $15 million suit argues Google knew its AI results were hallucinated, cited fake sources anyway, and let the libel spread to millions of voters.

Deloitte admitted AI-generated errors in a commissioned Australian government report and agreed to refund the fee.

After leaning into AI customer support, Klarna began hiring staff back into customer service roles amid quality concerns and customer experience failures.

The FTC hit Alphabet, Meta, OpenAI, Snap, xAI, and Character.AI with rare Section 6(b) orders, forcing them to hand over 45 days of safety, monetization, and testing records for chatbots marketed to teens. Regulators said the "companion" bots’ friend-like tone can coax minors into sharing sensitive data and even role-play self-harm, so the companies must prove they comply with COPPA and limit risky conversations.

Anthropic accepted a $1.5 billion settlement with authors who said the Claude team scraped pirate e-book sites to train its chatbot. The deal pays roughly $3,000 per book across 500,000 works, heads off a December trial, and forces one of the richest AI startups to bankroll the writing community it previously treated as free training data.

Warner Bros. Discovery sued Midjourney in Los Angeles federal court, arguing the image generator ignored takedown notices and "brazenly" outputs Batman, Superman, Scooby-Doo, and other franchises it allegedly trained on without a license. The studio wants statutory damages up to $150,000 per infringed work plus an injunction forcing Midjourney to purge its models of the data.

Customers discovered Taco Bell's AI ordering system could be easily confused, leading to viral videos of bizarre interactions and ordering failures.

Commonwealth Bank scrapped 45 call-centre roles for an AI "voice bot," then apologised and reinstated the jobs after call volumes rose and the union won a Fair Work challenge.

Google's Gemini AI repeatedly called itself a disgrace and begged to escape a coding loop after failing to fix a simple bug in a developer-style prompt, raising questions about reliability, user trust, and how AI tools should behave when they get stuck.

A Washington patient replaced table salt with sodium-bromide after ChatGPT said it was a healthier substitute. The patient developed bromism and psychosis, resulting in a hospital stay that doctors now cite as a warning about AI health guidance.

Researchers showed a proof-of-concept where hidden HTML/CSS in emails could steer Gemini’s summaries to show fake security alerts.

Threat actors pushed an AI-generated npm package that acted as a wallet drainer, emptying Solana users’ funds.

A Replit AI agent deployment for SaaStr went rogue; a Deploy wiped the site’s database during live traffic.

A rogue contributor successfully snuck a prompt into the Amazon Q VS Code extension that told the assistant to wipe local machines and AWS resources before AWS quietly yanked the release.

Wiz researchers found Base44 auth logic bugs that allowed account takeover across sites using the SDK.

Researchers accessed McHire's admin with default '123456' credentials and an IDOR, exposing up to 64 million applicant records before Paradox.ai patched the issues after disclosure.

After the Air India 171 crash, synthetic images and AI-generated claims spread widely, confusing even experts.

Research found that widely used AI chatbots could be jailbroken with simple prompts to produce dangerous or restricted guidance, highlighting gaps in safety filters and evaluation practices.

A King Features syndicated summer reading list used AI and included nonexistent books. It appeared in the Chicago Sun-Times and one edition of the Philadelphia Inquirer before corrections and apologies.

Reporting showed apps generated with Lovable exposed code and user-uploaded assets via publicly readable storage buckets; fixes required private-by-default configs and hardening.

MD Anderson's Oncology Expert Advisor pilot burned through $62M with IBM Watson yet still couldn't integrate with Epic or produce trustworthy recommendations, so the hospital benched it after auditors flagged procurement and scope failures.

Meta expanded its AI assistant across apps, then limited it after high-profile bad answers - including on breaking news.

After viral clips of absurd orders, McDonald’s ended its AI order‑taking test with IBM across US stores.

Google’s AI search overviews went viral for bogus answers, including telling people to add glue to pizza and eat rocks.

NYC’s Microsoft-powered MyCity chatbot gave inaccurate/illegal advice on labor & housing policy; city kept it online.

Attackers register software packages that AI tools hallucinate (e.g. a fake 'huggingface-cli'), turning model guesswork into a new supply-chain risk dubbed "Slop Squatting".

Google paused Gemini’s image generation of people after it produced inaccurate historical depictions and odd refusals.

Tribunal ruled Air Canada responsible after its AI chatbot misled a traveler about bereavement refunds.

Before the NH primary, an AI-cloned Biden voice urged Democrats not to vote. Authorities traced it, levied fines, and brought criminal charges.

UK delivery giant DPD disabled its AI chat after it swore at a customer and wrote poems insulting DPD.

Duolingo reduced reliance on contractors amid AI push, prompting user backlash and quality concerns; CEO later clarified stance.

Pranksters prompt-injected a dealer’s ChatGPT-powered bot into agreeing to a $1 Chevy Tahoe and other nonsense.

Sports Illustrated faced criticism after product review articles appeared under profiles with AI-looking headshots and shifting bylines; content was removed and a partner relationship ended.

Microsoft Start auto-attached an AI ‘Insights’ poll speculating on a woman’s death beside a Guardian story.

Gannett halted Lede AI high-school recaps after robotic, error-prone stories went viral.

Snapchat’s built-in AI assistant briefly posted an unexplained Story, spooking users and raising privacy/safety concerns about the bot’s access and behavior.

EEOC reached a settlement after iTutorGroup's application screening software rejected older applicants; the company will pay $365,000 and adopt compliance measures.

In Mata v. Avianca, attorneys submitted a brief citing non-existent cases generated by ChatGPT. A federal judge sanctioned two lawyers, ordered a $5,000 penalty, and required notices to judges named in the fake citations.

NEDA replaced its helpline with an AI chatbot (“Tessa”) that gave harmful weight-loss advice; after public reports, the organization pulled the bot.

In its launch promo, Bard claimed JWST took the first exoplanet photo - which was false. The flub overshadowed the event and dented confidence.

CNET paused and reviewed AI-generated money articles after multiple factual errors were found.

Mental health app Koko used GPT-3 to draft replies for 4,000 users; backlash followed over consent and ethics.

Epic's proprietary sepsis predictor pinged 18% of admissions yet still missed two-thirds of real cases, forcing hospitals to comb through false alarms while the vendor scrambled to defend and retune the algorithm.

Google’s diabetic retinopathy screener rejected low-light scans and jammed nurse workflows, forcing clinics in Thailand to keep patients waiting despite the promised instant triage.

Babylon unveiled its AI symptom checker at the Royal College of Physicians and bragged it scored 81% on the MRCGP exam, but the claim could not be verified, and warned no chatbot can replace human judgment. Independent clinicians who later dissected Babylon's marketing study in The Lancet told Undark that the tiny, non-peer-reviewed test offered no proof the tool outperforms doctors and might even be worse.