How to Win and Still Lose: Delaware Court of Chancery’s Expanding Focus From Individual AI Misuse to Organizational Governance

A July 1, 2026 order from the Delaware Court of Chancery provides another insight into the risks of using generative artificial intelligence (“GenAI”) without adequate human review, and highlights the court’s increased focus on organizational controls governing AI use. Although Leiske v. Kidd concerned litigation conduct and the duties of attorneys and law firms rather than directors’ fiduciary duties or corporate AI governance, the order suggests a growing judicial focus on not only individual misuse of AI, but also on the processes, controls, and oversight surrounding how AI is deployed within an organization. That focus reflects themes discussed in our May 2026 post, which examined SDNY’s inquiry into organizational questions arising from the use of ChatGPT in government decision-making.

The post How to Win and Still Lose: Delaware Court of Chancery’s Expanding Focus From Individual AI Misuse to Organizational Governance appeared first on Enhanced Scrutiny.