Courts confront whether generative AI is a product or a service

On October 7, 2026, Reuters reported that a growing group of US lawsuits is testing whether product-liability doctrine can apply to generative-AI services, while OpenAI argues that ChatGPT is an interactive service rather than a tangible product. A September 25 dismissal motion in Florida is among the first substantive responses, and OpenAI is due to respond to consolidated San Francisco complaints by October 30. The classification question matters to enterprise users because contractual allocation of risk, insurance coverage and incident response may differ materially depending on whether courts treat model output as a product, service or information. Legal departments should avoid waiting for a definitive label and instead negotiate warranties, audit rights, indemnities and escalation procedures against the concrete failure modes of each use case.