2027 Priorities Put SEC Focus on Investment Advisers’ AI Disclosures
Key Facts
The U.S. Securities and Exchange Commission has made investment advisers’ use of artificial intelligence an examination priority for fiscal 2027, focusing on the accuracy of their statements and whether their operations and controls are consistent with disclosures to investors. The SEC said examiners will consider whether statements are “fair and accurate” and whether operations and controls are “consistent with disclosures made to investors.” The focus concerns investment advisers and their use of the technology; it does not announce a comprehensive review of AI companies’ disclosures or valuations. The scope therefore differs from the claim in the initial version that the SEC was moving to address inflated valuations of technology companies. The examination matters because it links what advisers say about AI tools to how they actually use them in their operations and controls.
The priorities document defines the scope of this focus in its investment adviser section, emphasizing advisers’ use of AI and whether their public statements match their practices and controls. That means the examinations cover disclosures and controls related to an adviser’s business, not every company that develops or uses AI. The priorities also do not mention a review of valuations of companies in the sector. The SEC said the priorities document reflects the views of staff in its Division of Examinations and does not create new legal obligations. It described the document as “without force or effect of law” and said it does not amend existing law or add obligations.
The regulatory framework for AI disclosures also covers public companies, but in a separate context dating to 2024. That year, the SEC said staff in its Division of Corporation Finance would consider how companies describe opportunities and risks related to the technology. This included the clarity of a company’s definition of AI, disclosure of material opportunities and risks, and a focus on the actual or proposed use of the technology. The SEC also highlighted the importance of having a reasonable basis for statements about AI prospects. The agency said staff “will consider how companies describe these opportunities and risks.”
The SEC says existing rules may require companies to disclose how they use AI and related risks, depending on the nature and materiality of the information. Such disclosures may appear in descriptions of a company’s business, risk factors, management’s discussion and analysis, financial statements, and board oversight of risk. The guidance places responsibility for describing usage and risks within existing disclosure frameworks, without itself announcing a new rule. In a separate institutional development, the SEC’s Investor Advisory Committee submitted a petition seeking rules on disclosure of AI governance and risk management in public filings. The document is numbered 4-882, and the SEC records its issuance date as February 9, 2026.
In a separate enforcement case, the SEC announced on August 26, 2026, a settlement of charges against AI startup Genesis AI and its former chief executive over allegations involving projected revenue, valuation and customer demand. The SEC said the defendants raised more than $5.3 million from more than 4,000 investors between December 2019 and December 2024. It added that the complaint alleged the company’s valuation exceeded $200 million in 2022, based on subjective estimates. The case involves a specific enforcement action against one company and does not establish a general campaign to review AI companies’ valuations. It is also separate from the examination priorities covering investment advisers’ disclosures.
Debate over the returns on AI investment has coincided with funding pressure on companies building infrastructure for the sector. On October 15, 2026, Reuters reported that market sell-offs had prompted companies to delay fundraising plans or accept a higher cost of capital, as investors demanded evidence that returns could justify spending. Equity fundraising for the sector totaled $5.4 billion from the start of 2026 through that date, down 4.6% from the same period in 2025. Against a backdrop of investor sensitivity to long-term growth expectations, Goldman Sachs said in April 2026 that estimated value beyond the next decade accounted for about 75% of the S&P 500’s equity value, near a 25-year high. This highlights the weight of long-term growth assumptions in equity valuations, but does not directly link market moves to the SEC’s examination priorities.