Congress Weighs Federal AI Whistleblower Protections for Tech Industry Insiders

by Ian S. Lam and Talia Chang

On May 15, 2025, the Artificial Intelligence Whistleblower Protection Act (“AIWPA” or “Act”) was introduced by Senate Judiciary Committee Chair Chuck Grassley (R-Iowa) and represents a bipartisan effort to regulate and increase accountability within the AI sector. The Act remains pending and in late September, 2026, Senator Grassley attempted to fast track the legislation through unanimous consent ahead of congressional recesses. This legislation comes at a critical moment: though the AI sector is currently one of the fastest growing industries in history, it is also underregulated and lacking in accountability.  This article discusses the protections of the Act, its general importance, to whom it applies, and how the AIWPA, if enacted, would interact with existing whistleblower legislation and framework.

What is the Artificial Intelligence Whistleblower Protection Act?

The Act was introduced to establish employment protections for current and former employees of AI companies who “blow the whistle” or seek to disclose information about AI security vulnerabilities or violations and the substantial dangers that AI may pose to public safety, public health, or national security.  Security vulnerabilities refer generally to system failures or lapses that may lead to the theft, hacking, or acquisition by foreign entities of certain AI technology or resources.  AI violations include violations of federal laws related to the development and use of AI, as well as an AI company’s failure to appropriately respond to a specific danger that AI may pose to public safety.  The legislation is endorsed by the National Whistleblower Center, Government Accountability Project, and the Center for AI Policy among other leading public advocacy groups.

Why is the AIWPA important?

As it currently stands, there is a lack of transparency within the AI sector, which, when coupled with the absence of clear, safe pathways for individuals to report concerns to the federal government, may lead to detrimental social and financial outcomes.  For example, sycophancy spirals in certain AI chatbots have emboldened delusional ideas prompted by users which can contribute to major mental health crises.  When an industry lacks proper regulation and government oversight, whistleblower programs encourage employees to investigate misconduct and violations of the law by guaranteeing such individuals protection from retaliation.  Representative Jay Obernolte (R-California), a co-sponsor of the Bill, stated that “[a]s artificial intelligence becomes more powerful and more deeply embedded in our infrastructure, we must ensure that those who identify potential threats can speak up without fear of retaliation.”

Who may be protected by the AIWPA?

Individuals covered under the AIWPA (“covered individual”) include current and former employees and independent contractors of AI companies.  If passed, the AIWPA would provide protections against retaliation to covered individuals who bring forward information regarding any conduct they reasonably believe to constitute an AI security vulnerability or AI violation.

How would the AIWPA operate within the framework of the Whistleblower Protection Act of 1989?

The Whistleblower Protection Act of 1989 (“WPA”) is an important piece of legislation that protects most federal civil service employees who expose government illegality, waste, and corruption.  The WPA prohibits employers from retaliating against whistleblowers, which could, but will not always, take the form of demotion, suspension, reduced pay, or termination.  Though the AIWPA is a separate, self-contained piece of legislation that does not amend the WPA, the Act, if passed, would serve to supplement and add to  federal whistleblower statutory protections.  Notably, while the WPA generally imposes a three-year period within which a potential whistleblower may file a claim, the AIPWA proposes a six-year timeframe.

Can whistleblowers earn monetary rewards for reporting misconduct under the AIWPA?

The AIPWA does not directly provide financial incentives for reporting misconduct.  The purpose of the bill, similar to that of the WPA, is to shield employees from employer retaliation.  This framework differs from, for example, the Securities and Exchange Committee (“SEC”) Whistleblower Program, which offers a potential financial reward for reporting securities fraud.  Nonetheless, a separate federal statute, the False Claims Act, provides a mechanism for whistleblowers to file an action on behalf of the United States (a “qui tam” action), which may permit a whistleblower to receive financial compensation for bringing such an action, if that action results in a financial recovery for the government.

What is an example of fraud in the AI industry, and how might it fall within the scope of the False Claims Act?

To provide some context, one example of fraud within the AI industry is AI washing, a deceptive marketing practice where companies misrepresent or overstate the use of AI in their products, services, and operations.  Companies may engage in AI washing for numerous reasons but often do so to present an inaccurate image of so-called innovations without investing the actual time or resources to build innovative artificial intelligence.  The SEC has already brought charges (now settled) against two investment advisors for their purported use of AI washing.  In a related press release, the Chair of the SEC stated, “when new technologies come along, they can create buzz from investors as well as false claims by those purporting to use those new technologies.  Investment advisors should not mislead the public by saying they are using an AI model when they are not.  Such washing hurts investors.”

Why the AI Whistleblower Protection Act Matters

The passage of the AIWPA  is crucial: employees of AI companies, as some of the most well-informed members of the public about AI, are likely the most cognizant of the possibilities, risks, and harms associated with AI, and thus form the first line of defense in holding major AI companies accountable and protecting public safety.