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AI Flaws Are Being Hidden—Why Researchers Need Legal Protections to Report Them 

 March 20, 2025

By  Joe Habscheid

Summary: The conversation around artificial intelligence has largely been about innovation and possibilities, but a looming issue remains—how do we identify and report AI flaws without exposing researchers to legal risks or allowing companies to hide major vulnerabilities? A group of AI experts is proposing a structured way for third-party researchers to report issues, ensuring that flaws get addressed transparently and quickly. Given AI’s expanding influence, failing to implement a standardized reporting process could lead to serious security risks, including manipulation, misinformation, and even exploitation by bad actors.


Why AI Flaws Must Be Reported Transparently

Artificial intelligence is moving fast—far faster than regulatory frameworks can keep up. With companies like OpenAI, Google, and Anthropic rolling out powerful models, these systems now influence business decisions, healthcare, cybersecurity, and even politics. The problem? Many of these models are still black boxes, and when researchers uncover dangerous vulnerabilities, there isn’t always a clear way to report them responsibly.

Take the case of GPT-3.5. In late 2023, independent researchers found that under certain prompts, this model would stop functioning properly and begin spewing snippets of personal data from its training set. OpenAI was informed privately, and the issue was fixed before being made public—but not all discoveries follow this path. Some defects could stay hidden out of fear of legal repercussions or corporate resistance, putting the public at risk.

The Current AI Flaw Reporting Problem

Unlike cybersecurity, where well-defined channels exist for reporting software vulnerabilities, AI development still operates with legal ambiguities. Third-party researchers who want to stress-test AI models could find themselves penalized for violating terms of service agreements. If flaws aren’t uncovered in controlled settings, they may only emerge when exploited by malicious actors.

Large AI firms conduct their own internal safety tests, but self-regulation has limits. Some companies hire external firms for additional auditing, but there’s no formal structure allowing independent researchers to both investigate AI models and report back without fear of facing legal threats.

The Proposal: A Systematic Approach to Flaw Disclosure

To prevent security flaws from being ignored or mishandled, a coalition of more than 30 AI researchers is pushing for a standardized framework for AI vulnerability disclosure. Their proposal includes three core recommendations:

  • Standardized AI Flaw Reports: A clear and structured reporting format that makes it easier for researchers to document and communicate flaws.
  • Infrastructure Support for Independent Researchers: Big AI firms should establish guidelines that allow third-party researchers to legally and ethically probe models.
  • Industry-wide Knowledge Sharing: AI firms should create a process for sharing discovered flaws across companies to prevent security gaps from being exploited by bad actors.

This approach mirrors the structures already in place for cybersecurity, where bug bounties and responsible disclosure programs have made software more secure. However, in AI, the legal landscape is murkier, leaving researchers unsure whether disclosing an AI flaw could expose them to lawsuits.

The Legal and Ethical Barriers to Reporting AI Security Issues

One of the biggest challenges with AI model oversight is the legal grey area researchers find themselves in. Companies often enforce strict terms of service that prohibit deep probing of AI models, even in the interest of public safety. Without legal protections, researchers could face corporate retaliation for honest reporting.

Ilona Cohen, chief legal and policy officer at HackerOne, emphasized this risk: “AI researchers don’t always know how to disclose a flaw and can’t be certain that their good faith flaw disclosure won’t expose them to legal risk.” Without protections similar to those offered to cybersecurity researchers, AI experts may hesitate to identify and report concerns.

The Stakes: Why AI Flaw Reporting Matters Now

The security risks associated with AI models aren’t limited to small glitches. These models can be misused to generate misinformation, assist in cyberattacks, and bypass ethical constraints. Unchecked vulnerabilities could also allow unintended biases to seep into automated decision-making systems, affecting hiring practices, medical diagnosis, and law enforcement.

If researchers aren’t empowered to investigate and report flaws, AI companies could continue pushing models that are fundamentally flawed. Without public accountability, some issues may never be addressed, leaving users exposed to untested and potentially dangerous technology.

Government Oversight and the Uncertain Future of AI Regulation

This proposal comes at a moment when the U.S. government’s role in AI oversight is itself uncertain. The Biden administration launched the AI Safety Institute to evaluate and mitigate risks in the most powerful models. However, budget cuts pushed by Elon Musk’s Department of Government Efficiency have made the future of this oversight unclear.

With government-run AI safety programs on shaky ground, industry self-regulation may be the only near-term option. If AI companies do not adopt the proposed disclosure framework voluntarily, the risks of an unchecked AI industry will only grow.

Next Steps for the AI Industry

The researchers spearheading this initiative include prominent figures from MIT, Stanford, Princeton, and Carnegie Mellon, as well as companies such as Microsoft and Mozilla. Although they have begun discussions with AI giants like OpenAI and Google, none of the big players have formally committed to adopting the new reporting framework.

Without clear policies in place, AI models will continue to be rolled out with undisclosed risks. Researchers will remain uncertain about whether they can safely share discoveries, and flaws may go unresolved until they become crises. The stakes are clear—either the AI industry agrees to transparency and responsible disclosure, or we risk AI systems being controlled by corporate interests with little external accountability.

AI security isn’t just an industry problem—it’s a global one. The faster companies commit to an ethical disclosure process, the safer these technologies will be for everyone.

#AISecurity #AIEthics #ResponsibleAI #FlawDisclosure #AIRegulation #Cybersecurity

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Featured Image courtesy of Unsplash and fabio (oyXis2kALVg)

Joe Habscheid


Joe Habscheid is the founder of midmichiganai.com. A trilingual speaker fluent in Luxemburgese, German, and English, he grew up in Germany near Luxembourg. After obtaining a Master's in Physics in Germany, he moved to the U.S. and built a successful electronics manufacturing office. With an MBA and over 20 years of expertise transforming several small businesses into multi-seven-figure successes, Joe believes in using time wisely. His approach to consulting helps clients increase revenue and execute growth strategies. Joe's writings offer valuable insights into AI, marketing, politics, and general interests.

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