GigaCloud Must Face Securities Claim Over AI Use Statements

GigaCloud Technology Inc. failed to convince a federal court to dismiss securities claims in a class action against it alleging that it made misleading statements about its AI use in its offering materials.

The plaintiffs’ AI claims are based on specific factual statements from former GigaCloud employees, which Judge Jesse M. Furman was willing to accept for purposes of the motion to dismiss. As a general matter courts take statements from confidential informants as true at the pleadings stage of proceedings, Furman said Monday.

But GigaCloud convinced Furman to dismiss claims based on alleged misstatements in the offering materials concerning ...