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When a Minnesota solar company discovered Google’s AI was spreading lies about them being sued by the state attorney general, they decided to fight back with a lawsuit demanding up to $210 million.

Wolf River Electric claims Google’s AI Overview feature mixed up facts from different cases and falsely told people the company faced legal action for improper business practices. They weren’t even defendants in that lawsuit.

The AI’s screw-up wasn’t just embarrassing. It was expensive. One customer saw the bogus AI summary and canceled a $150,000 contract on March 5, 2025. That’s real money walking out the door because a computer couldn’t get its facts straight.

Other customers bailed too. Potential employees didn’t want to work for a company they thought was in legal trouble. The fake news spread online like wildfire, with people trusting and repeating the AI’s lies.

Wolf River wants between $110 million and $210 million for the mess. Their lawyers say this case tests whether companies have to answer for their AI’s mistakes. Good luck with that.

Google moved the case from state court to federal court, where Judge Jeffrey Bryan now handles it. Smart move by Google. Federal courts love Section 230 of the Communications Decency Act, which protects tech companies from getting sued over content they publish.

Google admits the AI messed up but says that’s not defamation. They’ll probably argue they didn’t write the summary, their AI did, so they’re off the hook. Classic tech company defense.

The whole thing started because Google’s AI Overview feature tries to be helpful by summarizing search results. It pulls info from multiple sources and spits out conversational answers at the top of search pages. This case illustrates the dangers of AI hallucinations that regularly occur in artificially generated content. The AI cited sources including a Minnesota Star Tribune article and Angie’s List, but none of them actually linked Wolf River to the attorney general’s lawsuit. Google’s autocomplete feature also suggested the company had ongoing legal problems, making things worse.

Except when it gets confused and ruins a company’s reputation.

Wolf River’s lawyer calls this a test of corporate accountability. Maybe. But Google’s got deep pockets and better lawyers. They haven’t even said if they fixed the AI system that caused this disaster. Why would they? Admitting fault costs money.

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