Understanding the AI Whistleblower Protection Act

Artificial intelligence has been exponentially increasing in functionality and has greatly altered the landscape of many different environments. Some of the brightest scientific minds have postulated about the existential threat AI has if it overreaches and there’s been many  movies that deal with the issue from The Terminator series, to the recent Mission Impossible. Now, more than ever, it’s critical to keep AI in check before overly sentient and willful rogue programs potentially destroy mankind – therefore its more important than ever to encourage AI whistleblowers to step forward to prevent this projected catastrophe from occurring which is why there is the introduction of the AI Whistleblower Protection Act.

Without the AI Whistleblower Protection Act, there’s still provisions of the SEC whistleblower program and other Department of Justice whistleblower programs that potentially address some of the AI scenarios. The easiest and least dangerous to humanity, but dangerous to people’s pocket books is the false claims of AI where companies falsely claim products that are autonomous or automated when they are not. The SEC has indicated it is looking into prosecuting companies for false representations along those lines.

Specifically, the SEC has signaled its intent to scrutinize public companies that misrepresent their technology as “autonomous” or “AI-driven” when in reality it is merely rule-based automation or otherwise lacks the claimed capabilities. In a March 2024 public statement, SEC Chair Gary Gensler emphasized that the Commission is closely examining “AI washing” a term used to describe overstated or deceptive claims about artificial intelligence under existing antifraud provisions of the securities laws, including Rule 10b-5 under the Securities Exchange Act of 1934.

The distinction between “autonomous” and “automated” is critical. An autonomous system is typically one that can make decisions and adapt its behavior based on inputs without human intervention, whereas an automated system follows pre-programmed rules and lacks the capacity for independent reasoning or learning. Mischaracterizing automation as autonomy can materially mislead investors about a company’s technological sophistication, scalability, and competitive edge, which may inflate stock valuations and investor expectations.

However, the more dangerous one is the potential for AI to do what Ultron in the Avengers broadcast, make humans extinct.  To examine how that could occur one needs to follow the logic and evolution of it and recognize that artificial intelligence is increasingly becoming more prominent in every facet of society. According to PricewaterhouseCoopers LLP, artificial intelligence is projected to make up more than $15.7 trillion of the global economy by 2030. Almost every industry will be impacted impacted including,  healthcare, automotive, financial services, technology, entertainment, manufacturing, and energy and the law.

 Real-World DOJ Cases Show AI Fraud Is Already Here

Real cases involving artificial intelligence have started to be investigated by the Department of Justice. In April 2025, the CEO of an e-commerce company claiming to use AI technology was indicted for a scheme to defraud investors by making false statements about the technology. More recently in May 2025, a False Claims Act settlement was reached with a robotics company that develops computer vision and AI warehouse management solutions. The company obtained grants from the National Science Foundation while allegedly failing to disclose that it was ineligible for the award. These cases, however, revert to concerns about overstating capabilities. As the AI False Claims Act case points out if the company obtains a government contract for AI and lies about the work done, benchmarks or how the funds are appropriated, there’s nothing novel or cutting edge about that, its good old fashioned fraud against the government which the False Claims Act is a mechanism to address in which the AI Whistleblower could obtain an AI whistleblower reward of up to 30% of what the government re-captures.

Why AI Needs Whistleblower Protections

With the inevitable expansion of this emerging technology, concerns surrounding its ethical use have increasingly grown. In 2024, a former governance researcher at OpenAI, the creator of ChatGPT, and one of the leading artificial intelligence research companies, released a statement expressing the belief that AI labs have strong financial incentives to avoid oversight and that whistleblower protections are needed to give those in the industry the ability to warn others about the dangers of artificial intelligence without the fear of retribution. The researcher was only able to make this statement because he refused to sign a non-disparagement agreement upon his termination.

What Protections Are Included in the Act?

In response to the increased scrutiny involving artificial intelligence, Senator Chuck Grassley has introduced a proposed federal act known as the “AI Whistleblower Protection Act“. The Act is designed to provide explicit whistleblower protections for individuals developing artificial intelligence so they can speak out against any wrongdoing or fraud against the federal government.

Section 3 includes the specific protections that Grassley is proposing:

“SEC. 3. ANTI-RETALIATION PROTECTION  AI WHISTLEBLOWERS. (a) PROHIBITION AGAINST RETALIATION.—No employer may, directly or indirectly, discharge, demote, suspend, threaten, blacklist, harass, or in any other manner discriminate against a covered individual in the terms and conditions of employment or post-employment of the covered individual (or the terms and conditions of work provided by the covered individual as an independent contractor) because of any lawful act done by the covered individual— (1) in providing information regarding an AI security vulnerability or AI violation, or any conduct that the covered individual reasonably believes constitutes an AI security vulnerability or AI violation, to— (A) the appropriate regulatory official or the Attorney General; (B) a regulatory or law enforcement agency; or (C) any Member of Congress or any committee of Congress; (2) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of an appropriate regulatory or law enforcement agency or the Department of Justice, or any investigation of Congress, based upon or related to the information described in paragraph (1); or (3) in providing information regarding an AI security vulnerability or AI violation, or any conduct that the covered individual reasonably believes constitutes an AI security vulnerability or AI violation, to— (A) a person with supervisory authority over the covered individual at the employer of the covered individual; or (B) another individual working for the employer described in subparagraph (A) whom the covered individual reasonably believes has the authority to— (i) investigate, discover, or terminate the misconduct; or (ii) take any other action to address the misconduct.”

Under the proposed Act, employers are prohibited from discharging, demoting, suspending, threatening, blacklisting, harassing, or otherwise discriminating against a whistleblower for reporting misconduct related to artificial intelligence (including security vulnerabilities or violations), participating in government investigations, or making disclosures to their supervisors internally.

How This Fits into Existing Whistleblower Laws

The AI Whistleblower Protection Act would supplement existing whistleblower law by making it clear that the enforcement of protections for AI whistleblowers is possible when reporting concerns about artificial intelligence. Some other laws that may serve as the basis for a whistleblower legal claim are the False Claims Act and the Dodd-Frank Act. The False Claims Act is implicated if there was fraud related to government funds. The Dodd-Frank Act covers both securities fraud under the SEC Whistleblower Program, as well as commodities and futures fraud under the CFTC Whistleblower Program.

If you’re unsure whether your situation is covered by current law or proposed reforms, contacting an AI whistleblower law firm can help clarify your rights.

How You Can Take Action as an AI Whistleblower

If you are a potential whistleblower who believes that artificial intelligence development in your company is does not have proper safeguards, is being developed in an unethical way or is a threat, there are several steps you can take as the AI Whistleblower Protection Act continues to gain momentum:

1. Document Every Instance of Potential Misconduct: Save any helpful emails, reports, test results, presentations, and note dates in which you have lawful access to. The documentation can serve as evidence necessary to qualify you for an AI whistleblower reward. Sitting down for a free and confidential consultation with an AI whistleblower law firm should be your first step before you go ahead and start collecting documents.
2. Reach Out to an AI Whistleblower Lawyer: Even while the AI Whistleblower Protection Act is still passing through Congress, there are still multiple laws that may serve to give you adequate protection for voicing your concerns. An AI whistleblower law firm can help you determine the proper legal strategy for your potential claim depending on what laws are potentially implicated and what the potential amount for an AI whistleblower reward may be.
3. Continue to Monitor the AI Whistleblower Protection Act: While not yet passed, there are many nonprofits that are continuing to monitor the development of the bill.

The legal environment surrounding artificial intelligence is evolving rapidly. If you decide to come forward, now may be the best time to take action as your voice can have a disproportionate impact on public safety and preservation of innovative integrity. As the new legislation will enhance AI whistleblower rights, even though remedies will exist, meaningful enforcement and protection will exist when retaining a knowledgeable AI whistleblower lawyer with experience in existing statutes as well as potential new developments in the law.

By retaining a mission-led AI whistleblower law firm, you have the benefit of smart lawyering to pursue claims under the False Claims Act, Dodd-Frank, or any new legislation. Speak with an experienced and/or qualified AI whistleblower lawyer as soon as possible to protect your rights, make the best case possible, and help to maximize your rights and rewards. A good and/or well-rounded AI whistleblower law firm will ensure that you have strong AI whistleblower protection in place whilst ensuring the people that exploit this technology are made accountable and exposed.