AI Disclosure Under U.S. Securities Law

On December 4, 2025, the SEC Investor Advisory Committee approved a recommendation encouraging the Commission to consider a disclosure framework addressing the impact of artificial intelligence on issuer operations, board oversight, and material effects on consumer-facing matters. While non-binding, the recommendation signals an emerging expectation that issuers be able to explain and support judgments regarding AI-related risks and impacts in periodic disclosures.

This paper examines the evidentiary implications of that recommendation. It argues that AI disclosure under U.S. securities law presents a structural challenge: issuers are asked to assess and disclose material effects arising from AI-mediated representations that are probabilistic, time-variant, and often generated by systems the issuer does not operate or control.