The explosion of generative AI in the workplace has created a new and largely unaddressed category of litigation risk. In May 2025, a federal court in the Southern District of New York ordered OpenAI to preserve and segregate all ChatGPT output log data that would otherwise be destroyed under its default 30-day deletion policy, marking one of the first judicial orders to treat AI-generated content as electronically stored information subject to legal holds, i.e., the obligation to preserve potentially relevant evidence once litigation is reasonably anticipated. The order, issued over OpenAI’s objections grounded in user privacy and regulatory compliance, signals that courts will expect litigants to preserve AI artifacts with the same rigor applied to email, documents and structured data.

Read on for an analysis of how existing discovery rules already reach AI-generated content, the sanctions companies may face for failing to preserve it and the practical steps clients should take now to close the gap.