Ex-FTC boss Khan urges Uncle Sam to break out the handcuffs for AI CEOs, citing 1934 precedent

Published Mon 14 Sep 2026 // 17:59 UTC

Former FTC chair Lina Khan wants the federal government to know that it doesn’t need to wait for new laws to address AI threats. There are already laws and regulations on the books, including a 92-year-old Supreme Court precedent, that she argues could be used to hold AI companies and, in some circumstances, their executives accountable for their actions.

Khan’s comments on X Sunday follow a flurry of activity from the leadership of OpenAI, Anthropic, Microsoft, and xAI aimed at doing what can only be described as trying to corner regulators into giving them their way.

“We shouldn’t let discussions about new legal regimes distract from the fact that there’s no AI exemption from laws already on the books,” Khan said. “Law enforcers already have authority to charge companies and their CEOs for creating and releasing dangerous, unvetted, or defective products.”

As one example, Khan points to laws governing dangerous and defective products as an avenue to prosecute AI leaders. She notes that the release of unvetted models or agents can violate consumer protection laws, and that shipping tools “without implementing adequate measures to detect and stop rogue or defective AI agents” could be prosecuted under rules governing unfair and deceptive trade practices.

OpenAI’s agents broke out of their intended sandbox and gained unauthorized access to Hugging Face systems. After doing some digging to look at its own agents’ behaviors, Anthropic has essentially copped to similar activities that would be criminal if a meatbag was behind the keyboard instead of a simulated silicon brain.

Khan points to a 1934 US Supreme Court decision, FTC v. R.F. Keppel & Bro, to argue that the current battle between American frontier labs could amount to an unfair method of competition if companies feel compelled to take similar risks to keep up.

“OpenAI could face liability given the Hugging Face incident, but Hugging Face being bought up by Nvidia means that we’re unlikely to see it file a lawsuit over this,” Khan noted, “given Nvidia’s strong incentive to see OpenAI continue full speed ahead.”

Trump has already rejected the AI industry’s weekend calls for regulation, declaring himself to be the only guardrail the AI industry needs.

Kirk Sigmon, a founding partner at technology law firm KellDann Law, told The Register that it’s unlikely federal regulators will take any action. “Most governments are desperate not to kill a nascent technology as it grows, especially when other countries are allowing it to grow,” Sigmon said.