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AI Law Wiki News for August 31, 2026

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August 31, 2026 — Apple and OpenAI exchanged filings in Apple's trade-secret suit over former Apple engineers now working at OpenAI.[1][2] Financial Stability Board Chair Andrew Bailey warned G20 finance ministers and central bank governors that frontier AI could materially increase cyber risk and undermine confidence in the global financial system.[3][4] The European Commission designated ChatGPT as a Very Large Online Search Engine and Reddit and Roblox as Very Large Online Platforms under the Digital Services Act.[5] California lawmakers also completed final approval of the following AI-related bills on August 31: SB 574 on generative-AI use by attorneys and arbitrators;[6][7] SB 947 on automated employment decisions;[8] SB 1119 on child-safety duties for companion chatbots;[9] and SB 867, a temporary prohibition on toys containing companion chatbots.[10] AB 1709 also completed legislative passage.[11] Musicians David Lowery, Jason Isbell, Guy Forsyth, and Eduardo Calle filed a proposed class action alleging that Suno commercially exploits musicians’ identities through name-indexed AI music generation.[12][13]

Contents

  1. FSB chair warns G20 about frontier AI cyber risk
  2. European Commission designates ChatGPT, Reddit, and Roblox under DSA
  3. Apple and OpenAI exchange trade-secret filings
  4. California SB 574 clears Legislature
  5. California SB 947 clears Legislature
  6. California SB 1119 clears Legislature
  7. California SB 867 clears Legislature
  8. California AB 1709 clears Legislature
  9. Musicians bring publicity-rights class action against Suno

FSB chair warns G20 about frontier AI cyber risk

The FSB published Bailey’s letter ahead of G20 finance ministers’ and central bank governors’ meetings scheduled for August 31 and September 1 in Asheville, North Carolina.[3][4] Bailey wrote that frontier models’ growing autonomy, problem-solving abilities, and threat capabilities could alter the speed, scale, and economics of cyber risk, with disruption capable of crossing jurisdictions.[4][14]

Bailey called on authorities to support safe and responsible model release and deployment globally, while emphasizing response, recovery, and third-party-provider resilience for financial firms.[3][4] The FSB said it was considering steps within its financial-stability mandate to address the risks.[3]

European Commission designates ChatGPT, Reddit, and Roblox under DSA

The European Commission designated ChatGPT as a Very Large Online Search Engine and Reddit and Roblox as Very Large Online Platforms after the services declared at least 45 million average monthly users in the European Union.[5][15]

The designations give the services four months, through January 2027, to comply with additional DSA obligations, including assessing and mitigating systemic risks involving illegal content, harms to minors and users’ well-being, fundamental rights, elections, and public security.[5][15]

Apple and OpenAI exchange trade-secret filings

Apple told the federal court that forensic analysis of former employee Chang Liu’s MacBook showed that he accessed confidential Apple engineering files, including a circuit schematic, after joining OpenAI; Apple also alleged that Liu enlisted an OpenAI colleague to help erase evidence after learning of Apple’s investigation.[1][16]

OpenAI denied wrongdoing in a same-day filing and argued that Apple’s access controls and offboarding practices—not unlawful conduct by departing employees—caused the disputed access.[2] OpenAI said employees may lawfully leave Apple for another company and criticized Apple’s procedures for personal iCloud access, device returns, and requests for post-departure assistance.[2]

California SB 574 clears Legislature

On August 31, the California Senate concurred 39–0 in Assembly amendments to SB 574 and ordered the measure engrossed and enrolled after the Assembly passed it the same day.[6] The bill now awaits action by Governor Gavin Newsom.[7]

The measure would prohibit attorneys from delegating the practice of law to generative AI, require reasonable steps to verify AI outputs and correct erroneous or hallucinated material, and restrict entry of confidential or other nonpublic information into public generative-AI systems.[17] It would also prohibit arbitrators from delegating decision-making to generative AI or relying on AI-generated information outside the record without advance disclosure to the parties.[17][7]

California SB 947 clears Legislature

On August 31, the California Senate concurred 28–10 in Assembly amendments to SB 947 and ordered the measure engrossed and enrolled after the Assembly passed it on August 30.[8] The bill now goes to Governor Gavin Newsom.[8]

SB 947 would bar employers from relying solely on an automated decision system when disciplining, terminating, or deactivating a worker; when an employer primarily relies on such a system, a human reviewer would have to conduct an independent investigation and corroborate the output.[18] It would require written notice when an automated system was primarily relied upon, provide workers access to specified data and corroborating evidence, and authorize enforcement by the Labor Commissioner or a public prosecutor with a $500 civil penalty per violation.[18]

California SB 1119 clears Legislature

On August 31, the California Senate concurred 39–0 in Assembly amendments to SB 1119 and ordered the measure engrossed and enrolled after the Assembly passed it the same day.[9] The bill now awaits action by Governor Gavin Newsom.[19]

The bill would require companion-chatbot operators either to verify users’ ages or apply specified child protections to all users, and would require risk assessments, mitigation measures, child-safety policies, crisis protocols, default usage and notification limits, independent audits, and Attorney General reporting.[20] It would also restrict targeted advertising and use of children’s personal information and authorize enforcement by public prosecutors and civil actions by harmed children or their parents or guardians.[20]

California SB 867 clears Legislature

On August 31, the California Senate concurred 39–0 in Assembly amendments to SB 867 and ordered the measure engrossed and enrolled after the Assembly passed it the same day.[10] The bill now awaits action by Governor Gavin Newsom.[21]

Until January 1, 2031, SB 867 would prohibit manufacturing, selling, exchanging, possessing for retail sale, or offering to a retailer a toy that contains a companion chatbot; violations would be subject to the civil-liability provisions that govern companion-chatbot operators.[22]

California AB 1709 clears Legislature

AB 1709 completed legislative passage on August 31, 2026: the Senate passed it 39–0 and the Assembly concurred 78–0. The official status records enrollment on September 4 and still lists an active passed bill, rather than an enacted law, as of September 7.[11]

The enrolled bill would prohibit covered platforms from providing addictive features, including defined personalized feeds and autoplay, to users under 16. It expressly permits accounts for those users if no addictive features are provided, and includes age-verification requirements. It would also create an e-Safety Advisory Commission and provide public enforcement.[23]

See California legislation.

Musicians bring publicity-rights class action against Suno

Musicians David Lowery, Jason Isbell, Guy Forsyth, and Eduardo Calle filed Lowery v. Suno, Inc. in the District of Massachusetts on August 31, seeking to represent classes of musicians whose names allegedly function as prompts in Suno’s AI music system.[12][13]

The complaint alleges that Suno encoded musicians’ identities into its model and can generate songs, descriptions, and images evoking a named artist, including through prompt variations that allegedly bypass name filters.[12][24] The plaintiffs assert claims under state and territorial publicity-rights laws and the Illinois Biometric Information Privacy Act; they seek class certification, damages, disgorgement, and injunctive relief.[12]

See case page: Lowery v. Suno, Inc.

References

  1. ↑ 1.0 1.1 Apple filing in support of expedited discovery, August 31, 2026
  2. ↑ 2.0 2.1 2.2 9to5Mac, “OpenAI calls trade secret dispute ‘a mess of Apple’s own making,’” September 1, 2026
  3. ↑ 3.0 3.1 3.2 3.3 Financial Stability Board, “FSB Chair warns of risks arising from frontier Artificial Intelligence (AI) models,” August 31, 2026
  4. ↑ 4.0 4.1 4.2 4.3 Financial Stability Board, “FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: August 2026,” August 31, 2026
  5. ↑ 5.0 5.1 5.2 European Commission, “Commission designates ChatGPT, Reddit, Roblox under Digital Services Act,” August 31, 2026
  6. ↑ 6.0 6.1 California Legislative Information, “SB 574 Bill History,” August 31, 2026
  7. ↑ 7.0 7.1 7.2 Office of Senator Thomas J. Umberg, “Umberg Legislation Advances to Governor’s Desk,” September 1, 2026
  8. ↑ 8.0 8.1 8.2 California Legislative Information, “SB 947 Bill History,” August 31, 2026
  9. ↑ 9.0 9.1 California Legislative Information, “SB 1119 Bill History,” August 31, 2026
  10. ↑ 10.0 10.1 California Legislative Information, “SB 867 Bill History,” August 31, 2026
  11. ↑ 11.0 11.1 California Legislative Information, AB 1709 Bill Status, checked September 7, 2026
  12. ↑ 12.0 12.1 12.2 12.3 Lowery v. Suno, Inc., Complaint, No. 1:26-cv-14005 (D. Mass. filed August 31, 2026)
  13. ↑ 13.0 13.1 Variety, “Jason Isbell Leads New Suno Lawsuit,” September 1, 2026
  14. ↑ The Guardian, “AI could cause global economic downturn, Bank of England governor tells G20,” August 31, 2026
  15. ↑ 15.0 15.1 Reuters, “ChatGPT, Reddit, Roblox to adhere to EU’s ‘very large platform’ rules,” August 31, 2026
  16. ↑ TechCrunch, “Apple shares ‘shocking evidence’ against former employee accused of stealing company data for OpenAI,” August 31, 2026
  17. ↑ 17.0 17.1 California Legislative Information, “SB 574 Bill Text,” amended August 21, 2026
  18. ↑ 18.0 18.1 California Legislative Information, “SB 947 Bill Text,” amended July 2, 2026
  19. ↑ Office of Senator Steve Padilla, “A Victory for Children: Adam's Law Poised to Establish Most Comprehensive Child Protections in the Country,” September 1, 2026
  20. ↑ 20.0 20.1 California Legislative Information, “SB 1119 Bill Text,” revised July 2, 2026
  21. ↑ Office of Senator Steve Padilla, “First-In-Nation AI Toy Moratorium Moves to Governor’s Desk,” September 1, 2026
  22. ↑ California Legislative Information, “SB 867 Bill Text,” accessed September 2, 2026
  23. ↑ California Legislative Information, AB 1709 enrolled text, September 4, 2026, sections 2–3
  24. ↑ Consequence, “Jason Isbell Files Class Action Against AI Music System Suno,” September 1, 2026
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