In recent remarks at the Program on Corporate Compliance and Enforcement Spring Conference 2024, the Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, noted that one throughline in recent financial frauds is that “elevated investor interest in rapidly developing technology or offerings often leads to elevated investor risk.” In that spirit, the SEC has targeted artificial intelligence (AI) as a potential risk area for investors that needs to be monitored. “While perhaps not quite yet a perfect storm, there’s certainly one brewing around AI,” he said. When considering how to address the risks presented by AI, the Commission’s experience with environmental, social and governance (ESG) provides an instructive starting point. For example, companies were incentivized to exaggerate or make misleading statements about their ESG activities or products, which prompted the SEC to bring enforcement actions for “greenwashing.” Similar conduct is occurring with AI, and the SEC recently settled charges against two registered investment advisers for AI washing. “I hope these actions put the industry on notice,” he warned. This article summarizes two settlement orders that targeted alleged AI washing, along with insights on key takeaways from industry experts. For comments from Grewal on greenwashing, see “SEC’s Grewal Discusses Enforcement’s Focus on Preventing False and Misleading ESG Claims” (Apr. 18, 2024).