Pieces Technologies, Inc.

Why this entry matters most to Texas buyers

This is the closest thing yet to a template for how the Texas Attorney General treats an AI vendor’s capability claims, and it was brought under the Texas Deceptive Trade Practices Act rather than any federal statute. Any Texas business buying AI software is buying it in the shadow of this settlement.

What was claimed

Pieces Technologies, based in Dallas, sells generative AI software to hospitals that summarises patient charts and clinical notes.

To show its outputs were reliable, the company published accuracy metrics. It advertised a “severe hallucination rate” of “<1 per 100,000” and a critical hallucination rate of “<0.001%”. A hallucination is an output that looks plausible but is fabricated or wrong.

What the Attorney General found

The OAG’s investigation concluded those metrics were likely inaccurate and may have deceived hospitals about the accuracy and safety of the products, contrary to the DTPA.

The software had already been deployed at at least four Texas hospitals at the time.

Pieces denies any DTPA violation. The matter was resolved through an assurance of voluntary compliance rather than a finding of liability.

What was agreed

Notably, no monetary penalty was imposed. What Pieces accepted instead runs for five years and is arguably harder:

• Any marketing that cites a metric, benchmark, or similar measurement of its generative AI outputs must clearly and conspicuously disclose both what the metric means and how it is calculated. Alternatively, Pieces may engage an independent third-party auditor to substantiate the claim.
• No false, misleading, or unsubstantiated representations about accuracy, testing methodology, monitoring, or what its metrics mean.
• No misrepresenting whether an endorser or reviewer is independent, and no omitting financial arrangements with endorsers.
• Written disclosure to every current and future customer of any known or reasonably knowable harmful use or misuse, including risks of physical or financial injury from inaccurate output.
• Documentation of the data and models used for training, the intended purpose, and known limitations.

The transferable point

The company was not punished for its software underperforming. It was pursued for publishing a precise-sounding accuracy number without disclosing how that number was produced.

A buyer’s practical defence follows directly: when a vendor quotes an accuracy figure, ask what it measures and how it was calculated. A vendor that cannot answer is making the exact claim Texas has already acted on.

What is not established

An assurance of voluntary compliance resolves an investigation without any admission or finding of wrongdoing, and Pieces expressly denies violating the DTPA.

We have not yet contacted Pieces Technologies for comment. When we do, the attempt and any response will appear on this entry.