The Yacht Law Podcast
The Yacht Law Podcast answers your legal questions about buying, selling, and owning superyachts; working aboard them; and more. Hosted by maritime attorney Michael Moore and yachting journalist Diane Byrne, each episode provides insight into how to better navigate the luxury yachting lifestyle. While we discuss common legal issues, the information shared is not intended as legal advice or as a substitute for the personalized advice of your own attorney. Consider The Yacht Law Podcast as a starting point to better educate yourself about the superyacht world.
The Yacht Law Podcast
Deep Fakes & Yacht Wakes: The AI Dilemma
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Artificial intelligence isn't coming to the yachting industry—it's already here, transforming operations, creating opportunities, and raising critical legal questions that owners, crew, designers, and builders need to understand now.
Maritime attorney Michael Moore and journalist Diane Byrne unpack the complex realities of AI in the luxury yacht sector, revealing how the absence of comprehensive federal regulations has created a Wild West atmosphere where innovation and exploitation exist side by side. "There is no comprehensive federal law in the United States of America concerning AI," Moore explains, highlighting how state-by-state approaches are creating a regulatory patchwork that poses challenges for an inherently global industry.
The conversation delves into disturbing trends including deepfake videos showing fictional yacht collisions and sinkings—content that generates clicks and revenue while potentially damaging vessel brands and spreading misinformation. AI-related false creations extend beyond social media to serious contexts, with Moore describing how attorneys have already been reprimanded for "hallucinations," citing non-existent legal precedents generated by AI systems.
Yet amidst these concerns lie remarkable opportunities. AI promises to revolutionize yacht operations through advanced fire detection systems that identify both smoke and heat before human perception, streamlined supply chain management to address construction delays, and data analytics that enable predictive maintenance. These innovations represent the positive potential of thoughtfully implemented artificial intelligence in the yachting ecosystem.
For yacht owners concerned about privacy and information security, the discussion offers valuable insights into data protection regulations and potential vulnerabilities. As Moore notes with characteristic clarity, "If you're not paying for the product, you are the product," a reminder that personal data has become a valuable commodity requiring vigilant protection, especially in the privacy-conscious world of luxury yachting.
Ready to navigate the complex intersection of artificial intelligence and yachting? Contact Michael Moore or Diane Byrne through the information in our show notes with your questions and suggestions for future episodes exploring more of this rapidly evolving technological frontier.
Have a yacht law question? Email it to info@megayachtnews.com or michael@moore-and-co.com for your chance to have it answered on our podcast. All requests for confidentiality and/or anonymity are respected.
Hiring a lawyer is a big decision. Visit Moore & Company for the legal team's qualifications and experience. And, to learn the latest about superyacht launches, shipyards, designs, and destinations, visit Megayacht News.
Welcome everybody. Michael, good to see you.
Speaker 2:Thanks. As always, Great to be here to get involved in our most challenging podcast to date.
Speaker 1:Yeah, there's a lot to digest. When you and I first started talking about this a couple days ago the whole idea of AI, how you're fielding lots of inquiries which is a good sign People seem to be conscious of doing the right thing and also maybe keeping an eye towards potential issues I was doing a little bit of my own digging and no matter what media it seems you read, you see info about how Microsoft is developing its own AI meta, which is Facebook, instagram, threads, whatsapp. It seems like they own every and any social media app out there. They're developing their own AI. If someone uses Chrome as their browser, they go to Google to do a search result right away. Now the first result is an AI summary, so you don't actually even have to go down the page and click on links anymore.
Speaker 1:There's so much going on in this world that's actually already in our everyday lives that yachting, being a bit more cognizant of it and trying to take proactive steps is a very good thing, certainly From a legal perspective. I'm sure you're hearing a lot of really good provocative questions people really trying to think six steps ahead, but I'm also sure that there are some people who are calling you with current problems. So why don't we, why don't we dive into a couple of the biggest ones?
Speaker 2:Totally. I mean I think that generally stated. I mean obviously, just like the world that you're principally in, which might be called publishing, or you know the certain broadcasting publishing you know along various platforms. The same is true with law. My principal practice, my core practice, is boats, planes and art. Of those three areas, I'd say the art world has been most affected. But you know, you start out by hearing these things about AI taking over the world and really bright people like Sam Altman arguing with uber, bright people like Elon Musk, and then you're kind of stopped when you hear Elon Musk say that he considers AI to be totally dangerous and Sam Altman, his former partner, is now dealing with open AI with Microsoft partner, who's now dealing with open AI with Microsoft. So you know, you start to come to your senses a little bit. Ai is not going to be taking over the world in any foreseeable future.
Speaker 2:But you start to realize that AI is just a computer on steroids and at the end of the day it's good day. The golden rule of ai is good data inputs equal better ai outputs so if people don't understand what.
Speaker 2:What's actually already happening? It's just happening on every single front. There's no aspect of life that's not currently involved in AI. Here's the shoe dropping.
Speaker 2:There is no comprehensive federal law in the United States of America concerning AI. There are lots of laws that are talking about it. There's a lot of things in the yacht world. They're trying to control data. They, they, the NDAs, bond disclosure agreements are rampant throughout the industry. What are they trying to do? They're trying to control information. They're trying to control yacht owners identities. They're what they're trying to do. They're trying to control information. They're trying to control the islanders' identities. What they're up to things that crew here on board when the islanders are trying to change the world?
Speaker 2:But there is a thing called a Degenerative AI Copyright Disclosure Act. That's not yet law, but that would be the kind of nonondisclosure sort of act. So what we're saying and, forgive me, my head is so full of AI that I read so much about it every day. I just received from one of my colleagues, isabella Hartman, one article that's 147, I think it's 147 pages long. I don't you know, if I started reading all this stuff, I'd be out of business. I would lose everything because I'd be, but I. I wouldn't understand AI, but I don't know how to monetize it.
Speaker 1:It's true that there's so much to wrap your brain around. Just from the standpoint of understanding the fun of it, put the law aside just for a second. The fun aspects of AI are pretty mind-blowing, but then when you start looking at that legal side and the deeper and, dare I say, darker side maybe I shouldn't say darker side there are some darker aspects to it, but there are also some gray areas right where, since there is no law on a federal level here in the United States and we're therefore getting patchworks of laws throughout each state I would imagine other countries are also running into the same situation. Maybe their upper level governments have not yet wrapped their arms around it.
Speaker 2:Right, the UK does seem to be ahead of everyone and they have very serious consequences for some of the most just I don't know what the word is heinous or horrendous or inappropriate crimes. They call them online horrors. I mean, if you think about it, ai is almost inherently online because it's computer-driven, and you mentioned the other day in one of our conversations about deepfake, this phone stuff that basically one of the scourges and I was interested as I read this stuff to read of the metrics, which is what AI is very good at doing is measuring things. How many people have suffered from deep fakes? But the biggest victims are girls. Probably, if we took one demographic, it was girls, vulnerable girls. There was a boy the other day who was extorted online and it was so sad because he paid the extortionist $50 to stop doing, not to do what he said he was going to do, which is reveal photographs, and $50, diane, I mean it's just so sad. And the kid basically left a note saying I don't have any more money. He killed himself and these are things that you know. You just really have to say this has got to stop. And I think the UK is right on top of that. Remember, it's a global thing, but yet the United Kingdom is way out in front on it. Two years in prison for what would be called deepfakes, six months of just for misuse of imagery, but they are actually trying like crazy to get it under control, which I think is a wonderful thing.
Speaker 2:In this country, colorado whatever you might want to think about the government of Colorado they have passed the Colorado AI Act and it's the comprehensive law to try to regulate high-risk artificial intelligence. But that's a state, everything's state to state. There is no federal law. The law is always tugging at the coattails of progress. It's always just kind of hanging on as that arrow disappears over the horizon. So that's, I think. Tougher AI regulations is obviously in the works, but it's going to take some doing because all of the big guys, the billionaire, the super-duper billionaire class, are almost all coming out of technology these days and, of course, they see danger in regulation. They'd rather do it themselves. We've seen Mark Zuckerberg testifying you know, I'll take care of this, like well, he didn't take care of it here, here, here and here, mr Zuckerberg, he said no, no, I'm going to take care of it, but that's where we are in the conversation.
Speaker 1:Right, right, so I'm wondering if maybe why don't we go through a couple of?
Speaker 2:these scenarios.
Speaker 1:I'm wondering if there are some longstanding traditional laws for lack of a better description maybe privacy laws, things along those lines that might actually apply in the AI world, and we could use a couple of yachting references, because there are some scenarios out there. You were just talking about the deep fakes. There's a video I just saw a few days ago. It was a video on YouTube and it was a collision two yachts colliding and of course, it took me by surprise. When I first saw it, I thought I didn't hear about this, and then I took a second look at it and I went wait a minute, something doesn't look right and I realized it was completely fake because of the way the yacht that collided into the other crashed into the bow.
Speaker 1:Suddenly there was liquid coming out and I thought that does not make any sense whatsoever but that's because, if you saw it too, you would think the same thing Like wait, this doesn't make sense. You and I know lots of people had already seen it had tens of thousands of views. Lots of people have no idea about yachting and, of course, they're buying into it Now the account in their defense, so to speak. Their account is very above board that they are an AI account. However, the flip side is they're creating content. There's more than this video. They're creating multiple videos of yacht collisions, yachts crashing into each other, yachts sinking, yachts doing this, yachts doing that. So it's not a leap of logic in my mind to say, ok, well, what's next? Are they going to show a yacht crashing into a docking? God forbid killing people.
Speaker 2:Are they going?
Speaker 1:to show crew on board having an accident, and are they going to go and find photos of crew members, photos of real owners, photos of real guests and create deepfakes of them on the boat? If so, even if they don't show people, if they show a yacht that is supposedly Yacht ABC, do existing laws in terms of name, image and likeness actually extend to prosecuting those deepfakes?
Speaker 2:and suddenly taking out the dock, people running for screaming for their safety, the big wave that followed the displacement, the water that would crest over the dock, and people would run even faster to try to go with that. And so what the bad guys learned is that people were fascinated with it. They loved seeing the mega yachts running into things being damaged like oh my God, oh my God, oh my God, and then crunch, the most recent example being the Mexican flagged tall ship that ran into the Brooklyn Bridge. Well, they're going to get paid for the clicks. They're going to get paid for the attention, the number of impressions I think they call them and how many eyeballs they speak of on the page. So they're creating in every context. Now, what will generate eyeballs on the page? And somehow, through these algorithms that are put out there by, I don't know, google and Facebook and Instagram and the usual suspects, you can create a total fake narrative. They will be paid. That's what it comes down to. They will make money.
Speaker 2:So the personal harm element is not there. Element is not there. But the word I loved because the first time I saw it was in the context of lawyers getting into trouble for citing what became known as hallucinations. And just that word alone. You know, are you suffering from hallucinations? Well, these lawyers got spanked in the worst way when there were no sites, there was no case that explained the precedence they were citing to a court to say this is the precedence you should follow in ruling in this case. And the judges came back and said look, you know, those cases don't exist. We tried to independently find them and in one case we now know where you got it, where it came from. It was an article. But in the article they say these are not, they just made up citations. Be like Smith versus Jones. And those things became known as hallucinations.
Speaker 2:But now we know the full meaning of that word is the fact that those two yachts never came together. That was somebody trying to create the mesmerizing attraction of yacht world. People are mesmerized by great wealth. They're all confused. They don't ever get to the point of realizing there are only 3,000 billionaires in the world. So get over it. Those are 3,000 people that their granddaddy was either a Maharaja or their granddaddy was a tomato farmer and told their grandchild you know, mark Zuckerberg, you should not get into tomato farming, you should get into Facebook or something. I don't know.
Speaker 2:But I think, going back to your, the question is I have not seen and again, we all have been embarked on this idea of how can we make this AI presentation interesting, Because there's not a lot of. You do see a lot of. You know the Bayesian sinking, which you've discussed before. Everyone is interested in the Bayesian. How did that happen? It's millions and millions of looks and videos and articles. What is it but, at the end of the day, full of incorrect and misleading information, really damaging a venerable brand in the yacht world I won't mention the name, but a venerable brand that goes back to some of the most noted and wonderful vessels ever created by humankind. In one particular case, created by a tech guy in collaboration with the yard Bayesian, by its name, obviously, is a tech guy, probably all over things like artificial intelligence. So that's on the ancillary to this crazy thing that seems to be now coming out that it was simply this inverted atomic bomb weather system that sank the boat and just literally pushed it under which explains, explains him anything.
Speaker 2:But that would be an example of a of a brand being completely hammered by a bunch of knuckleheads who don't really care to get to the truth. They care to create a very dynamic, sensationalist account of what happened. That's all I think that's my comment. Other than that, I just don't know. We talked about supply chain. Ai is going to revolutionize. One of the spames of the yacht building world is the supply chain problem. We can't install the cabinets yet because they're delayed in X country being built. And until we install the cabinets, we can't put in the floor coverings because the floor coverings fit around the cabinets. It's the illusion and we can't do. You know and just and it's all. Supply chain. That's going to be markedly improved by AI.
Speaker 1:That's a lot of the articles I read are about logistics and controlling logistics.
Speaker 1:Well, even along those same lines, the concept of data understanding, having a better grasp on the data surrounding how a business operates. Ai and consumer data have a lot of upsides as well. There's the longstanding practice. I remember back in high school the local mall was using the security cameras to scan the license plates of the cars that were in their parking lot and they would compare them over the course of several months and see if there was a correlation to when there were particular sales going on or particular times of the year outside of a sale. To learn more about the consumer behavior With AI, there's so much more now that retailers are doing and that yachting companies also can do in terms of understanding what consumers are buying, what product trends really are ticking the boxes for people.
Speaker 1:Yacht builders and brokers are already in some respects, doing some of this, oh yeah, and therefore be proactive with the crews and with the owners and say, hey, we've noticed that system XYZ is not operating properly. You might want to check into that. There's a huge upside to that. I think the flip side is, of course, there's a concern on the owner's side that having systems on board that would be able to track movement Lights going on and off in rooms, for example Super practical. Why have lights on 24-7 on a certain deck if somebody goes up there for 10 minutes and then leaves? There's that huge upside. But then the concern is well, wait a minute. If it knows what I'm doing and if it knows what my guests are doing, is it literally, figuratively watching me?
Speaker 1:Is that a privacy issue that builders and designers are going to have to grapple with the technologies.
Speaker 2:I mean, I think the thing is I'm not sure where you go with it, but I think I sent you a little article that I ran across and it was about this lovely startup and I think the numbers they were talking about for their product was. I think they needed to raise $25 million, which was like lunch on South Beach for some of our clients. But the product was a detection of forest fires and it detects, through AI, two things smoke and heat. Okay, so it combines these two things. Well, the standard in the yacht world. Correct me if I'm wrong, but I understand they're called smoke detectors. You have to have particulates, they have to kind of float from the source. With no wind, they're in an enclosed space engine room, whatever but those particulates have to be dense enough to get to the smoke detector, which is a wonderful thing and, by the way, the number one thing that defeats claims for fire loss in the art world. In other words, every policy of insurance speaks of certification of fire extinguishers. Almost without exception, they drill down specifically on certification of fire extinguishers and fire detection systems, but the system that this couple is doing out in the west coast of the United States is they haven't even thought about yachts. That's the last thing on their mind. What they're thinking about is the devastation to Malibu or the Pacific Palisades, these astonishingly bad, recurring for millennia problems. But they basically have come up with an AI system that says these astonishingly bad, recurring for millennia problems. But they basically have come up with an AI system that says, actually, we have a much better program than anything you people are dealing with. It's an AI system and we will tell you, before a human being can see it, if there's smoke coming up from any part of that forest. And even better, we will double check it with heat Could be a campfire, could be whatever. But you will know, for your $25 million investment in our business, it's just one step away from the outworld. I wanted to say that our business, it's just one step away from the art world. So that's, I wanted to say that because I think it's just exciting. We see a lot of fires. We know the fire losses. We have fire losses in the office, we know how it works Fire on boats, particularly this thing that most people think is this ionian lithium, ion battery problem. But AI has an algorithm for you that will solve that problem. Now you mentioned earlier. I just want to mention it.
Speaker 2:Data regulation is one of the early stage initiatives. There's actually regulations at the federal level, if you can believe this, trying to stop the states from passing laws. They don't want a patchwork of laws and I mentioned earlier that Colorado's artificial intelligence a very comprehensive, very complex, deeply thought through, from what I've read act. But the feds are, whoever they are. The Trump administration is jealous, it seems, of some state getting out in front of that. What they should be doing, in my humble judgment Marison I'm a lawyer, I'll get this, laura moreandcocom is they should be embracing it, but they have other things in their plate. But all I'm saying is now whereas the data your point, the general data protection, it's all about personal data and they realize now that if you're not paying for the product, you are their product.
Speaker 1:Yeah, absolutely. We won't know that by now.
Speaker 2:Remember the moment you realized that, Like oh shit, but the personal data stuff it was as early as 2018, it seems, was the target, but now it's kind of moved to another level. There are these large language models. They're trying to grapple with the abuse of moved to another level. There are these large language models they're trying to grapple with the abuse of people's personal data. So I guess that's as simple as I can put it.
Speaker 1:Yeah, yeah, well, also similar to that, these large language models. Since you just mentioned that, that opens the door to a whole other big issue, which is copyrighted material. A lot of the tech companies that are behind the AI companies want to push for all copyrighted material to become fair use for them, to train their AI models. And their big argument is that it's going to help them compete with China, because China is using everything under the sun to develop their own.
Speaker 2:AIs.
Speaker 1:Now I get the idea of wanting their AIs to be more human-like in the chatbots, for example, and to have better understanding of all sorts of questions that people might be asking. Like you said earlier, the AI is only as good as the information that's being put into it. So they want it to be more accurate. I understand that and I respect that, but there's always the but. The flip side is that everything that is copyrighted can't just suddenly be free reign. You sent a really interesting article through about lawsuits that Disney and.
Speaker 1:Universal have right now against an AI company for copying some of their characters and not asking for permission. Can we use your characters to train?
Speaker 2:our.
Speaker 1:AI models. That would have been a simple way to handle it, that's not how they handled it. Bring it into the yacht world. Yacht designers, I'm sure, can tell legendary stories of people copying their designs going back for decades. From what I have seen, there's been very little legal action taken over the years in terms of that. There's actually a pretty famous story. There's a, a yacht that keeps popping up. It's not a real yacht, it's a fake yacht. Really, that that pops up all the time called history supreme oh my gosh, this is the, the so-called gold yacht.
Speaker 1:You didn't see this oh my gosh, this is a. This is a crazy story. We actually wrote a whole story about how it's a story.
Speaker 2:Yeah, so long story short.
Speaker 1:There's a there whole story about how it's a fake story. So long story short. There's a industrial designer who's created a bunch of different bejeweled items An iPhone case, apparently, is what he's the most famous for. So he fabricated flat out fabricated this entire story about cladding a baya a 100-foot baya in gold.
Speaker 1:Oh my God, and having gold fixtures, solid gold, this solid gold, that solid gold in the coatings, and it goes on and on and on, and it is just 100% fabricated. There's no way that this existed. Just understanding the logics and the physics of the auditing, there's no way it could have happened. But all it took was a quick phone call over to Baya when this occurred and Baya said no, this didn't happen. What the person did was take a photo from their website and he photoshopped it and he faked this entire story incredible that's, that's absolutely madness, but that's what's going on with the I the ai world now too, where people.
Speaker 2:People don't want to look at gold. You know gold, glittery gold, it's, there's. There's probably a million quotes about all the glitters is not gold. There's something positive in my mouth but my and that and that would certainly apply to that case, because it's not even gold. It glitters, but like gold. But I think that it's a classic example of. I mean, maybe by it would welcome the pr, the millions of eyeballs that were on the story, but what a ridiculous story. All created for the benefit of the creator to make money off the clicks and the impressions, the eyeballs that go to the page so so, creator to make money off the clicks and the impressions, the eyeballs that go to the page so you can almost sense the abuse.
Speaker 2:Yeah, something you said, diane. I just want to think about it for just a moment. But yeah, I mean, it seems innocuous but it's harmful at the end of the day. You mentioned fair use, and fair use is this kind of. We have to have an exception when people are lecturing and mentioning things or writing articles, and so, yeah, fair use is a huge question about usage of data and copyrighted materials.
Speaker 2:Copyright per se things that are copied is probably the biggest power curve of online firms. I mean, if you can control the name FedShop or Lurssen or Bonetti, just to name three, you control some of the astonishingly powerful product intellectual property, but you also have the capacity to completely destroy that brand by putting out fake. If you're a competitor, for example, or just an evil person, you're mad at those brands. There has to be a way to address the crazies out there who will assault those brands because they had a bad experience. They were maybe they were terminated in the yard because they have something, and now they've gone whack-a-doodle on us. But yeah, it's the. The ai thing I think is the. I would say the message of this podcast is just start thinking, because some of you will become billionaires and you'll become clients of our firm. Not that they're all billionaires, but their jazz are rolled pretty well off. If they have a yacht, they're doing well.
Speaker 2:But my point is that this is going to be multifaceted. I think a couple of the most frustrating cases in the office right now are, in fact, fire loss cases. I think we've had maybe two or three where clients lost their yachts, want to be paid their insurance claims or part one. In one case the client built the yacht and is now being blamed for this fire loss and it's completely not supportable. But you know, there is a search for truth. All ye who labor here seek the truth. That's a motto that several, many judges benches in this country. There is no motto like that for the internet. It doesn't say all who labor here seek the truth. It's not. That's completely the opposite and it's really hard to sort it out and maybe artificial intelligence somehow, crazily enough, will be the ones that start sorting it out. Because I mean it's clear. I mean the IRS has announced because, in case anyone ever had any doubt, you really doubt they were using AI. I don't know if you really doubt they were using AI, but it is the largest user of AI in the government. They have 76 investigations going on of the largest hedge funds real estate investment partnerships. I just read this.
Speaker 2:A couple months ago this came out, but it's to go through. You know, it's like going through the big bill, the big beautiful bill. It was how many pages. It was like anna, corinna corinna and I, brothers scara, matzah and a few other things put together and you were so. We were all so shocked when some legislators said well, you know, we have to pass it before we'll ever really know what's in it. It was just Nancy Pelosi's way of saying something. Honestly, I have no time to read a thousand page bill, but now we have artificial intelligence that will actually read it for you.
Speaker 2:So it's one of those flexion points. It's good, it's bad, it's positive, it's negative, it's inherently evil and it's inherently wonderful all at the same time.
Speaker 1:Yeah, there's a lot to keep eyes on from the yawning standpoint, from the practical standpoints, the huge upsides to using it, also, unfortunately, the downsides, and keeping an eye on the developments in the law to see how it's all going to be shaking out. The more we even just speak about this in these few minutes, I'm sure there have been light year advances made by people working on AI. That's how quickly it seems to develop these days. So maybe we'll have two or three more episodes about this subject coming up.
Speaker 2:The most uplifting article. I'm going to leave it to you. I can tell you're we're going to sign off here. The most uplifting article I've read recently was that AI is now being used in assisted living facilities where you can call the AI number and discuss any subject that comes to your mind.
Speaker 2:And the one that they used as an example was a senior person who was depressed, who said to one of her caregivers you know, I just love baseball and I just miss it so much. I just don't really feel like I'm getting the kind of conversations I got when I was a younger person. Love baseball and it's I just miss it so much. I just don't really feel like I'm getting the kind of conversations like I got when I was a younger person and, as a as a woman, it was always very exhilarating to discuss baseball. They said, well, if you call this number, it has the human voice and you can ask the questions that come back from your youth. And they and they've measured the feeling of depression and it's been measurably improved. So maybe 20 years from now there'll be one that I can call and talk yachts or something you know what I'm saying the man he's still around.
Speaker 2:I mean the the Fed show, but Dick Van, I mean Henry DeVries. I remember him. He was a legendary guy. Very nice he's still around. And Dick Van Lantz.
Speaker 1:Let's hope for that. That would be pretty cool, oh my God. Well, everybody, thank you so much for your time and, Michael, as always, thank you for your insight. This has been an amazing conversation and I'm sure we'll be able to do some follow-ups in the coming months as more legal analyses of developments occur.
Speaker 2:It's always a pleasure, Diane. I like our conversations.
Speaker 1:Yeah, I get a lot out of these too. It's super educational for me. Well, everyone, if you have a comment or a question, and even a suggestion for an upcoming episode, you can contact Michael or me. Our contact information is in the show notes. Until next time, I'm Diane Byrne. Michael, why don't you sign off?
Speaker 2:And it's Michael Moore saying goodbye. Until we talk again, all the best.
