Jones Day warns of AI‑washing risks

Jones Day’s Spring/Summer 2026 digital-health update puts a legal label on a problem that has been building across healthcare tech deals: companies saying more about their artificial-intelligence capabilities than diligence can support. The law firm said the edition examines the “accelerating convergence of AI, digital health, and health care regulation” and opens with an Industry Insights feature on “AI-washing risks in digital health transactions.” That matters because the warning is not limited to marketing copy. In deal work, “AI-washing” points to a diligence problem: whether a target’s claimed AI functionality, data rights, model performance, regulatory posture and customer disclosures match what buyers are being told. Jones Day framed that issue as part of a broader tightening of scrutiny around AI-enabled healthcare products and services. (jonesday.com) A second legal signal came from the government-contracting bar. National Law Review on July 31 published “Can Government Contractors Use AI? A Legal Guide to AI Compliance and Disclosure Requirements,” by Aron C. Beezley and Nathaniel J. Greeson, adding to a growing body of guidance that treats AI use as a disclosure, documentation and compliance issue rather than just a productivity tool. (jonesday.com) Here’s the thread: 1/ Jones Day is warning that healthcare AI deals now carry “AI-washing” risk, not just ordinary product diligence risk. Its August 2026 digital-health update says AI, digital health and regulation are converging faster, and it leads with digital-health transaction risk. 2/ The phrase matters because it shifts the question from “does this company use AI?” to “can it prove what its AI actually does?” In M&A or vendor contracting, that means testing claims about automation, clinical use, outcomes, data access, and regulatory status. (natlawreview.com) 3/ In practice, that raises the bar for diligence. Buyers, investors and health-system customers are more likely to ask for evidence on training data rights, model governance, human oversight, validation, cybersecurity, privacy controls and customer-facing disclosures. (jonesday.com) Jones Day’s update places that within a wider healthcare-regulation context. 4/ The healthcare angle is important because digital-health products sit inside already regulated workflows. (jonesday.com) If an AI tool touches clinical decision support, patient communications, trial operations, reimbursement, privacy or telemedicine, the legal review is no longer separate from the product review. Jones Day’s update highlights FDA, DOJ, HHS, cybersecurity and privacy developments alongside the transactions discussion. 5/ The same pattern is showing up outside healthcare. National Law Review’s July 31 piece says government contractors using AI in proposals, software, data analysis and contract management face growing compliance and disclosure obligations. That suggests a broader market expectation: if AI is used in performance, someone may need to document it, disclose it or defend it. 6/ For healthcare vendors, that can affect contract structure as much as due diligence. (jonesday.com) If a seller’s AI claims are hard to substantiate, buyers may push for narrower representations, more specific disclosure schedules, indemnities, milestone-based earnouts, or pricing that reflects unresolved compliance questions. That is an inference from the legal issues Jones Day flagged, not a direct quote. (natlawreview.com) 7/ For provider buyers, the takeaway is similar. A vendor pitch that says “AI-powered” is becoming less useful than answers to narrower questions: what model is used, where the data comes from, what humans review, what outputs are logged, and what was disclosed to customers or regulators. The legal pressure is moving toward substantiation. 8/ The next place to watch is the documentation trail. (jonesday.com) Jones Day’s August 2026 update is already treating AI transaction claims as a legal-risk topic, and National Law Review’s July 31 contractor guide shows the same drift toward formal compliance and disclosure obligations.