5 Big AI Failures That Show What Can Go Wrong

InnovationEnterprise Tech5 Big AI Failures That Show What Can Go WrongByBernard Marr,Contributor.Follow AuthorJun 15, 2026, 01:30am EDTAI can transform businesses, but real-world failures at companies including Air Canada, Zillow, Samsung, CNET and IBM show how quickly things can go wrong.Adobe StockAI is already reshaping business, but it is also exposing some very expensive weaknesses.For all the excitement around generative AI, automation and intelligent decision-making, the technology is only as good as the strategy, governance and human judgment behind it. When those things are missing, AI can damage customer trust, leak confidential data, create legal headaches and turn small errors into very large bills.Here are five real-world AI mistakes, and the lessons every business leader should take from them.Air Canada: Chatbots HallucinationsIn 2024, a Canadian tribunal ordered Air Canada to pay compensation when a chatbot, built into its online booking system, hallucinated an imaginary discount. The bot reportedly gave incorrect advice about a fare discount to a passenger traveling to his grandmother’s funeral, assuring the passenger that they could pay the full fare and apply for the discount retrospectively. This turned out to be in contradiction to company policy, and Air Canada refused to honor the discount. However, the tribunal ruled it should pay the passenger $812.02 due to the chatbot’s error.The lesson, summed up by Air Passenger Rights president Gabor Lukacs, is “If you are handing over part of your business to AI, you are responsible for what it does.”MORE FOR YOUZillow: Machine Learning Miscalculations When property services specialist Zillow used machine learning to build a tool for automatically buying homes and flipping them for a profit, the results weren’t quite as expected. Its algorithmic model, designed to find optimum buying and selling prices to maximize trading profits, proved incapable of accurately predicting the chaotic behavior of the rea...