Law360: AI Regulatory Gaps May Fuel FCA Enforcement Action

O’Melveny partners Amanda Santella and Reema Shah, and counsel Elizabeth Arias Gray wrote a byline article for Law360 discussing the advancing implementation of AI in business operations, all while no federal regulatory framework exists to explicitly govern the development and deployment of AI tools.

“This creates a paradox with significant implications for companies across industries. The absence of comprehensive regulation does not mean reduced enforcement risk—quite the opposite. Enforcement actions have emerged as the administration's primary mechanism for policing AI use,” the authors write. “The False Claims Act—a powerful quasi-penal statute that punishes the knowing submission of false claims for payment to the U.S. government—is poised to become a centerpiece of those enforcement efforts. Because the FCA applies to both those that do business directly with the government and their subcontractors, it reaches a remarkably wide swath of conduct.”

Read the full article here.