Late last year, sales representatives at Wolf River Electric, a leading solar contractor in Minnesota, noticed a troubling trend: an unusual surge in canceled contracts. When they reached out to former clients for explanations, the responses left them stunned.

Customers reported that they had canceled after discovering online claims that the company had settled a lawsuit with the state attorney general over deceptive sales practices. Yet, Wolf River Electric had never faced any such legal action.

The issue became clear when the company’s executives conducted their own checks. Google search results, driven by the tech giant’s AI tool Gemini, displayed these false claims prominently at the top of the page. Typing “Wolf River Electric” into the search box automatically produced mentions of a supposed legal settlement.

With contract cancellations mounting and efforts to correct the information through Google’s tools failing, Wolf River executives concluded that their only option was to take legal action against the company for defamation.

“We invested years building a strong reputation,” said Justin Nielsen, who co-founded Wolf River in 2014 with three friends and grew it into Minnesota’s largest solar contractor. “When customers see a red flag like this, it’s nearly impossible to regain their trust.”

Wolf River’s lawsuit is among at least six defamation cases filed in the United States over the past two years concerning AI-generated content. The cases argue that AI tools not only created and spread false information about individuals or organizations but continued to do so even after their developers were made aware of the problem.

Unlike traditional libel or slander suits, these cases aim to determine whether content generated by machines rather than humans can be considered defamatory—a question that has drawn significant attention from legal experts.

“There’s no doubt that these AI models can disseminate harmful claims,” said Eugene Volokh, a First Amendment scholar at UCLA. In 2023, he dedicated an entire issue of the Journal of Free Speech Law to exploring AI defamation. “The real question,” he added, “is who is responsible for that content?”

One of the earliest AI defamation lawsuits was filed in Georgia in 2023 by Mark Walters, a talk radio host and Second Amendment advocate. He claimed that ChatGPT had damaged his reputation by falsely stating that he had been accused of embezzlement.

Proving intent is a core challenge in U.S. defamation law. But with AI algorithms operating as opaque systems, plaintiffs like Walters have sought to hold the companies that created the technology responsible. “You can’t create a monster and then disclaim all responsibility when it harms people,” said Walters’s lawyer, John Monroe.

The case was dismissed in May before reaching trial, partly because the journalist involved did not trust the ChatGPT-generated claim and verified it independently. Courts emphasize that for a statement to be defamatory, readers must be likely to believe it is true.

Although no AI defamation case in the U.S. has yet reached a jury, some have been settled. In April, Robby Starbuck, a conservative influencer, filed suit against Meta after an AI-generated image falsely implicated him in the January 6, 2021, Capitol riot and linked him to the QAnon conspiracy. Meta settled the case in August, adding Starbuck as an advisor to improve AI oversight.

Starbuck later filed a $15 million lawsuit against Google, alleging that the company’s large language models had produced false statements about him, which he claimed were “politically motivated.” Google has not formally responded but stated that most claims date back to 2023 and had been addressed at the time.

Defamation claims are not limited to the U.S. Irish DJ Dave Fanning discovered defamatory AI-generated content on Microsoft’s MSN portal, falsely suggesting he faced trial for sexual misconduct. Fanning filed suit in Ireland against both Microsoft and the news outlet that produced the article.

Nina Brown, a media law professor at Syracuse University, predicts that few AI defamation cases will ever go to trial. “Companies are likely to settle rather than risk a verdict,” she said.

Wolf River’s case is considered strong by many experts, partly because it can demonstrate tangible financial losses. The company cited $388,000 in canceled contracts and reported nearly $25 million in lost sales in 2024. Executives also noted that competitors had referenced the false claims to dissuade potential clients.

The lawsuit seeks at least $110 million in damages. A federal judge is currently determining whether the case will proceed in federal court or return to state court, where it was initially filed in March.

Wolf River is not a public figure, which could make it easier to prove negligence rather than “reckless disregard” for the truth, a higher standard for defamation in the U.S.

“Google made a mistake with this technology, and they acted quickly once we informed them,” said company spokesman Jose Castañeda. Yet, as recently as last Monday, Google search results still falsely stated that Wolf River faced a lawsuit from the Minnesota attorney general.

Vladimir Marchenko, Wolf River’s CEO, expressed deep concern. “There’s no Plan B for us,” he said. “We built this company from the ground up. Our reputation is everything.”