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.
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.