AI Update
The use of AI in banking was a topic in April, as Bank of America revealed it will spend $4 billion on AI initiatives in the coming year. The bank cited AI's usefulness in reducing IT support calls and the over 90% usage rates for its internal AI assistant. Wells Fargo's AI assistant is also seeing increased use, with the bank revealing the Fargo AI system handled 245.5 million interactions in 2024. AI is continuing to transform the banking sector by improving efficiency while also protecting highly sensitive data.
On the litigation front, the plot thickens in the ongoing saga of Elon Musk vs. OpenAI. The AI pioneer filed a countersuit against Musk, alleging his legal antics were part of a harassment campaign to gain a competitive advantage for his competing xAI company. Elsewhere, Microsoft and OpenAI suffered a setback when a U.S. district court judge upheld direct and contributory copyright infringement claims against both companies in the copyright infringement lawsuit brought by the New York Times.
In regulatory news, two democratic senators are seeking information from Google and Microsoft about their cloud computing partnerships with AI companies, expressing concern that those relationships could hinder competition in the AI industry. In the House, a bipartisan group of lawmakers reintroduced the NO FAKES Act, a bill sponsored by both the entertainment and tech industries, that seeks to protect creators and vulnerable individuals from online harms while maintaining free speech protections.
These and other stories appear below.
AI in Business
AI investments dominate venture capital in Q1
The U.S. market is split between a few firms raising large sums and others struggling through a capital shortage. In Q1 2025, AI startups attracted 71% of U.S. venture capital, totaling $65 billion out of the $91.5 billion raised. Even excluding OpenAI's $40 billion funding round, artificial intelligence still secured 48.5% of investments.
Source: Law 360 (sub. req.)
Federal Reserve urges for embracing GenAI in banking
Federal Reserve Governor Michael Barr emphasized the need for banking regulators to explore GenAI to better understand its implications for banks. At a San Francisco conference, Barr highlighted the transformative potential of the technology, offering several recommendations and urging regulators to stay informed. He noted that while banks are cautious due to regulatory constraints, fintech firms could drive AI adoption and accelerate banks' integration of GenAI or lead to partnerships. Barr also advised banks to carefully manage privacy and security risks when collaborating with fintechs and urged developers to address biases in AI models.
Source: Law 360 (sub. req.)
Metro Bank, Ask Silver partner on AI scam detector via WhatsApp
The AI detector allows customers to send screenshots of suspicious emails, websites, or letters to the "Metro Bank Scam Checker," which uses AI to assess and report fraudulent activity to authorities. The tool aims to enhance customer security and reduce fraud, as over £1 billion was lost to scams in the U.K. in 2023. Additionally, Lloyds Bank secured a cybersecurity patent to minimize false positive alerts, further emphasizing the importance of AI's role in protecting financial transactions.
Source: Tech Informed
Bank of America to spend $4 Billion on AI initiatives in 2025
Bank of America's AI-powered virtual assistant has enhanced efficiency in development, training, customer service, and client engagement. The bank saw significant gains from its AI tools used by more than 90% of its employees, such as reducing IT support calls by over 50%. Further, the bank's developers using a GenAI-based coding assistant experienced a 20% efficiency gain, and employees saved significant time preparing materials for business client meetings.
Source: PYMNTS
Wells Fargo's AI assistant crosses 245M interactions without exposing data
The Wells Fargo AI system, Fargo, handled 245.4 million interactions in 2024 without exposing sensitive customer data. Fargo assists customers with banking needs like bill payments and fund transfers through a privacy-first pipeline. The system transcribes speech locally, scrubs and tokenizes text for personally identifiable information detection, and uses Google's Flash 2.0 model to extract user intent, ensuring no sensitive data reaches the model.
Source: Venture Beat
Instagram using AI to ID teenagers posing as adults
Meta, Instagram's parent company, is utilizing AI to identify accounts operated by individuals under 18 to reduce underage use. This AI-driven approach aims to enroll teenagers in "Teen Accounts," providing parents with stricter content moderation. Meta enrolled 54 million teenagers in these accounts, with 90% of parents finding it beneficial. The company emphasizes the accuracy of its technology and offers users the option to change settings if misidentified. Meta also suggests that app store companies like Google and Appleand not social media companies-should be responsible for age verification.
Source: Washington Examiner
AI Litigation & Regulation
LITIGATION
NY Times challenges OpenAI's deposition limits
The New York Times asked a federal judge to mandate OpenAI president Greg Brockman to undergo a standard deposition in ongoing copyright lawsuits. The Times and other news company plaintiffs insist that Brockman should sit for 12 hours like other OpenAI witnesses, and should not be considered an "apex" witness, which would limit his deposition time. Conversely, OpenAI proposed that Brockman be deposed for eight hours in one day, covering multiple lawsuits. The parties also dispute whether OpenAI CEO Sam Altman qualifies as an apex witness.
Source: Law 360 (sub. req.)
AI avatar attempts to argue in New York Court
In a groundbreaking yet controversial event, an AI avatar attempted to present a legal argument before a New York appeals court. The AI, designed to simulate a human lawyer, was quickly identified by the judges as lacking a law degree and not being a real person. This incident highlights the growing integration of AI in the legal field, raising questions about the ethical and practical implications of AI in courtrooms.
Source: Associated Press
Court rules on Microsoft, OpenAI copyright claims
A U.S. District Judge upheld direct and contributory copyright infringement claims against Microsoft and OpenAI, brought by The New York Times Co., the Center for Investigative Reporting Inc. (CIR), and regional newspapers owned by Alden Global Capital, including the New York Daily News. Judge Stein dismissed claims under the Digital Millennium Copyright Act (DMCA), citing deficiencies in the news organizations' arguments. Specifically, the judge held that claims against Microsoft under the DMCA's copyright management information provision were insufficient, while the CIR and Daily News claims against OpenAI were valid. The judge also rejected OpenAI's time-barred defense and allowed contributory infringement claims to proceed. Trademark dilution claims by the Daily News also survived.
Source: Law 360 (sub. req.)
Perplexity AI countersues over TM dispute
Perplexity AI's counterclaims allege Perplexity Solved Solutions' trademark registration was obtained fraudulently by submitting a sham specimen to the U.S. Patent and Trademark Office. The countersuit claims Perplexity Solved Solutions did not have a legitimate business or genuine offerings at the time of the trademark application and used a fake website to secure the registration. In its January complaint, Perplexity Solved Solutions asserted that Perplexity AI's use of the trademark caused consumer confusion. Despite requests to cease usage, Perplexity AI continues to use the trademark, leading to the ongoing legal battle.
Source: Law 360 (sub. req.)
To view the full article click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
