SEC puts AI claims under the microscope as the spending boom accelerates

The regulator's fiscal 2027 examination priorities target the accuracy of AI claims, using existing disclosure rules instead of a new one The SEC wants to make sure investors understand what they are buying when a company says “AI.” On October 23, 2026, the agency’s Division of Examinations said its fiscal year 2027 examination focus will include how accurately registered firms describe their artificial intelligence capabilities. What the SEC is actually looking at There is no new AI disclosure rule here. The SEC has not written a dedicated rulebook for artificial intelligence. Instead, it plans to lean on the materiality frameworks it already has under Regulation S-K. That is the set of rules that governs what public companies must tell investors in their filings. The target has a name: “AI-washing.” It describes companies overstating, inflating, or misrepresenting what their AI actually does, much like “greenwashing” became shorthand for exaggerated environmental claims. The SEC’s stated tools are targeted comment letters and enforcement actions. Comment letters are the agency’s way of asking a company to explain or fix a disclosure. Enforcement actions are what happens when the ...