Who Is Responsible When AI Gets It Wrong

Short Answer

AI-related harm can produce contract, consumer, negligence and other claims with their own elements. TRAIGA supplies targeted public enforcement and no private cause of action. Chapter Business and Commerce Code § 552.101(b) also bars using its violation as the basis for a private action under another law; an independent claim must stand on that law’s elements. Texas proportionate-responsibility rules can allocate responsibility among covered parties when the chapter applies. Whether a software use fits a products-liability theory and whether Section 230 applies depend on the product, content and allegations. A vendor contract does not bind an injured nonparty to the buyer’s chosen allocation.

Which Laws Apply

Texas AI-specific: Business and Commerce Code § 552.052 and Business and Commerce Code § 552.101 (no private action); Business and Commerce Code § 552.105(e)(1) (misuse defense in Attorney General actions).

Generally applicable Texas law: negligence and negligent misrepresentation; DTPA, Business and Commerce Code § 17.41 to 17.63; products liability, Civil Practice and Remedies Code chapter 82; proportionate responsibility, chapter 33; Uniform Commercial Code warranties for goods.

Federal: 47 U.S.C. § 230; FTC Act.

Theories of Liability

Is AI a Product?

Civil Practice and Remedies Code Chapter 82 regulates products-liability actions through its definitions and remedies. It does not expressly decide every form of generative software or chatbot output. A products claim must identify the product, manufacturer or seller, alleged defect and harm. An out-of-state pleading ruling is not a Texas appellate decision or proof that the product is defective. Contract and consumer claims need separate analysis even where product classification is disputed.

Allocating Fault

Chapter 33 lets a jury assign percentages of responsibility to each defendant, settling party and designated responsible third party. In an AI case, that may include the developer, the business that deployed the system, an integrator and the user. Contracts can shift some of that exposure between businesses, subject to Texas’s express negligence and fair notice rules for indemnities.

Section 230

Section 230(c)(1) concerns treatment of a provider or user as publisher or speaker of information provided by another information-content provider. Whether a claim concerns third-party content, the provider’s own generated content or an independent design or business duty matters. It is not a blanket immunity for everything an AI assistant says or does. Do not assume a generated response meets the third-party-content condition without analyzing the system and claim.

Regulatory Enforcement

The Texas AG’s September 2024 Pieces assurance applies the DTPA to questioned AI accuracy marketing and records negotiated commitments, not adjudicated damages. TRAIGA’s misuse defense in Business and Commerce Code § 552.105(e)(1) belongs to the specified AG action. It does not automatically resolve an independently supported contract, privacy or consumer claim.

Illustrative Example (Hypothetical)

Hypothetical: a Texas property manager’s assistant misstates a repair obligation and a tenant incurs a loss. A contract or consumer claim depends on the lease, transaction, standing, reliance and harm. The vendor agreement may allocate defense or reimbursement obligations between the businesses; that is distinct from contribution under the governing liability rules. TRAIGA supplies no private action for the misstatement.

What Is Unsettled

Whether AI software is a product under chapter 82; whether Section 230 protects generated output; what standard of care applies to deploying AI in different settings.