Safety Guardrails & Validation Layers

Prompt injection hijacked Chevy's chatbot to agree to $1 sale. No business logic validated the offer. Enterprises are 100% liable for AI misrepresentations.

Probabilistic AI creates enterprise liability. LLMs hallucinate physically impossible structures. Diffusion models generate copyright-infringing audio. 99% plausible with 1% impossible equals catastrophic failure.

Air Canada's chatbot hallucinated a refund policy. Tribunal ruled companies liable for AI misrepresentations. Chatbots are digital employees with legally binding authority.

Instacart's Eversight AI ran randomized pricing experiments on 75% of its catalog, generating up to five different prices for the same item. A hidden 'hide_refund' experiment removed self-service refunds, saving $289,000 per week while deceiving consumers.

After processing two million orders, a single prank order exposed the absence of real-world reasoning in mega-prompt wrappers. The AI fulfilled a syntactically correct but operationally absurd request because it operated in a purely linguistic vacuum.

In a rigorous simulation, GPT-4 drafted patient messages where 0.6% posed direct death risk and 7.1% risked severe harm. Yet 90% of reviewing physicians trusted the output. Only 1 of 20 doctors caught all four planted errors -- the rest missed an average of 2.67 out of 4.

Pieces Technologies deployed clinical AI in four Texas hospitals claiming sub-0.001% hallucination rates. The Texas AG found these metrics 'likely inaccurate' and forced a five-year transparency mandate. Wrapper-based AI strategies built on generic LLM APIs cannot deliver verifiable accuracy for clinical safety.

Unconstrained LLMs allow social engineering exploits that break game progression. Players optimize the fun away, bypassing carefully balanced mechanics through persuasive dialogue.

Delphia claimed its model used ML on client spending and social media data -- the SEC discovered it never integrated any of it. Global Predictions marketed itself as the 'first regulated AI financial advisor' but produced no documentation. The FTC shut down DoNotPay's 'robot lawyer' for inability to replace an actual attorney.

Paradox.ai's McHire portal was secured by '123456' for both username and password on an account active since 2019 with no MFA. An IDOR vulnerability allowed iterating through applicant IDs to access millions of records. A separate Nexus Stealer malware infection exposed credentials for Pepsi, Lockheed Martin, and Lowes.

Single-sensor AI systems vulnerable to $5 adversarial stickers. 99% attack success on RGB-only systems. CNNs prioritize texture over shape, creating 1,000:1 cost asymmetry favoring attackers.

LLM wrappers optimize for plausibility, not truth. Drew Ortiz was successful pattern completion. 4% hallucination rate produces 400 false articles annually.

LLMs favor verbose narratives over truth, exhibiting 69-88% hallucination rates. Verbosity bias, sycophancy, and abductive reasoning failures make probabilistic justice fundamentally inequitable and unreliable.