[jacobr1]

Well, that depends on what we are selling. Are you selling the service, black-box, to accomplish the outcome? Or are you selling a tool. If you sell a hammer you aren't liable as the manufacturer if the purchaser murders someone with it. You might be liable if when swinging back it falls apart and maims someone - due to the unexpected defect - but also only for a reasonable timeframe and under reasonable usage conditions.

[Neywiny]

I don't see how your analogy is relevant, even though I agree with it. If you sell hammers or rent them as a hammer providing service, there's no difference except likely the duration of liability

[jacobr1]

There difference isn't renting or selling a hammer. The difference is providing a hammer (rent/sell) VS providing a handyman that will use the hammer.

In the first case the manufacturer is only liable for defects, for normal use of the tool. So the manufacturer is NOT liable for misuse.

In the second case, the service provider IS liable for misuse of the tool. If they say, break down a whole wall for some odd reasons when making a repair, they would be liable.

In both cases there is a separation between user/manufacturer liability - but the question relevant to AI and SaaS is just that. Are you providing the tool, or delivering the service in question? In many cases, the fact the product provided is SaaS doesn't help - what you are getting is "tool as a service."