In this article, we examine the unsettled legal landscape surrounding AI-generated defamation as generative AI rapidly advances without clear accountability. As of May 2025, no AI defamation case has reached a final judgment worldwide, leaving courts and regulators without definitive guidance. We review early litigation against OpenAI and Microsoft that failed to set precedent and focus on Starbuck v. Meta, a potentially landmark U.S. case alleging that Meta AI fabricated criminal conduct and continued publishing false statements despite notice. We clarify that Section 230 does not automatically shield AI companies when the AI itself generates defamatory content and explore how traditional defamation principles may apply. We also survey global regulatory responses, highlighting increased scrutiny of AI providers worldwide.
