Rezolve Ai Warns Generic LLM Chatbots Are Embarrassing Global Brands After The Gap, Inc. Incident

Rhea-AI Summary

{"summary":"","positive":[],"negative":[],"faq":[]}

Key Figures

Sierra AI valuation $10 billion Reported valuation of Sierra AI powering The Gap, Inc. chatbot

Market Reality Check

$2.20 Last Close

Volume Volume 60,525,045 is 3.12x the 20-day average 19,413,414. high

Technical Trading below 200-day MA; price $2.40 vs MA200 $3.10.

Peers on Argus

RZLV fell 19.19% while infrastructure software peers moved modestly (from -1.85% to +0.81%), pointing to stock-specific dynamics rather than a sector-wide move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 16	Prelim results, ARR	Positive	+28.0%	Preliminary revenue and ARR beats with positive adjusted EBITDA outlook.
Dec 04	Investor conferences	Positive	+11.5%	Participation in Maxim fireside chat and Northland Growth Conference.
Dec 03	Stablecoin rollout	Positive	+2.8%	Accelerated global stablecoin payments rollout after >$1B prior transactions.
Dec 01	Crownpeak acquisition	Positive	-10.5%	Acquisition of Crownpeak with added revenue, debt assumption and EBITDA accretion.
Nov 12	Leadership hires	Positive	-5.3%	Senior hires from major tech firms to drive AI commerce platform growth.

Pattern Detected

AI-related news often triggers sizable moves; most growth-focused updates saw positive reactions, but some strategic deals and leadership moves led to selloffs.

Recent Company History

Over the last two months, Rezolve Ai has issued multiple AI-focused updates, including preliminary results with December revenue expected to exceed $17 million and ARR above $200 million, plus guidance toward $500 million+ ARR by end-2026. It announced a Crownpeak acquisition with ~$70M expected annual revenue and debt assumption, expanded stablecoin payments after processing more than $1 billion in transactions, and reshaped its leadership team. Today’s AI positioning release fits this pattern of emphasizing proprietary, commerce-native AI infrastructure.

Regulatory & Risk Context

Active S-3 Shelf Registration 2025-10-17

An active Form F-3/A dated 2025-10-17 registers up to 37,000,000 Ordinary Shares for resale tied to a prior PIPE financing at $5.40 per share. The company will not receive proceeds from these selling holders, and filings note that actual or expected resales could increase share-price volatility or pressure the trading price.

Market Pulse Summary

The stock moved -8.3% in the session following this news. A negative reaction despite this positioning-focused AI announcement would fit prior instances where seemingly positive strategic news, including acquisitions and leadership upgrades, preceded share-price declines. Existing resale registrations for a large PIPE-related block may also weigh on sentiment if investors anticipate further selling. Past AI-tagged releases produced mixed follow-through, suggesting that branding advantages alone have not always offset concerns around dilution, execution, or integration risks.

Key Terms

large language models technical

"generic large language models (LLMs) are failing in live, customer-facing"

Large language models are advanced AI systems trained on vast amounts of text to understand and generate human-like writing, like a very fast reader and writer that learns patterns in words and sentences. They matter to investors because they can change how companies operate—automating customer service, speeding analysis, cutting costs, creating new products—and they introduce risks around accuracy, security and regulation that can affect a firm’s revenue and reputation.

LLMs technical

"generic, hallucination-prone LLMs are unfit for live commerceNEW YORK"

Large language models are advanced computer programs that read and generate human-like text by learning patterns from huge amounts of written material; think of them as digital employees that can draft reports, answer questions, summarize documents, or generate code. They matter to investors because they can change a company’s costs, speed of product development, customer service, and competitive edge — and they also create new risks and regulatory questions that can affect profits and valuation.

enterprise chatbots technical

"a fundamental flaw in the current wave of enterprise chatbot deployments"

Enterprise chatbots are software tools that act like automated digital assistants for a company, handling routine customer questions, internal help requests, or common business tasks through text or voice. Investors care because they can lower labor costs, speed up service, and improve customer retention—like adding a tireless employee that raises output without proportionally higher payroll—while also introducing risks around data security, implementation costs, and measurable return on investment.

transaction-aware technical

"Transaction-aware and outcome-driven; andGoverned by embedded compliance"

Transaction-aware describes a system, process, or piece of software that recognizes and tracks individual financial transactions and uses that context to make decisions — for example routing orders, flagging suspected fraud, or applying the correct accounting treatment. For investors it matters because transaction-aware tools reduce errors, speed up settlement, and improve compliance and risk controls, much like a GPS that not only shows your route but adjusts directions in real time based on current traffic.

AI-generated analysis. Not financial advice.

Independent reporting exposes enterprise chatbots discussing sex toys, magic mushrooms, and Nazis, underscoring why generic, hallucination-prone LLMs are unfit for live commerce

NEW YORK, Dec. 18, 2025 (GLOBE NEWSWIRE) -- Rezolve Ai (NASDAQ: RZLV) (the “Company” or “Rezolve Ai”), a leader in Agentic Commerce and AI-powered customer engagement, today highlighted recent independent reporting that underscores what the Company believes is an escalating and very public problem for the AI industry: enterprise chatbots built on generic large language models (LLMs) are failing in live, customer-facing environments, often spectacularly.

According to an article published this week by The Information, a technology and business news publication, a chatbot deployed on the website of The Gap, Inc., an American clothing retailer, responded to user queries involving sex toys, intimate products and references to Nazi Germany, despite those topics having no relevance to the retailer. The incident reportedly led to an apology being issued to the brand by Bret Taylor, CEO of Sierra AI, which powered the chatbot.

The same investigation found additional enterprise chatbots responding to questions about magic mushrooms, alcohol quantities for parties, and speculative medical and legal advice, highlighting how widely deployed systems are still unable to reliably stay within their intended commercial scope.

The Company believes these incidents expose a fundamental flaw in the current wave of enterprise chatbot deployments: generic, probabilistic LLMs designed to generate plausible language rather than verified outcomes, are being forced into environments that demand precision, determinism and control.

“When a chatbot on a major retailer’s website starts talking about sex toys, drugs or Nazi history, that’s not a corner case, it’s a design failure,” said Daniel M. Wagner, CEO of Rezolve Ai. “This is what happens when generic LLMs are pushed into environments they were never designed for.”

The article noted that The Gap, Inc. chatbot was powered by Sierra AI, a venture-backed company reportedly valued at approximately $10 billion, despite not owning or controlling its own foundational language model. Rezolve Ai believes this highlights a growing disconnect between valuation, technical control and real-world performance across parts of the AI sector.

Rezolve Ai’s Approach: Non-Hallucinatory, Proprietary, Commerce-Native

Rezolve Ai takes a fundamentally different approach. The Company owns and operates its own proprietary LLM and AI stack, architected specifically for commerce, payments and transactional customer engagement.

Unlike generic LLMs, Rezolve Ai’s “Brain Suite” is designed to be non-hallucinatory by construction, operating only within verified, permissioned and deterministic data domains, ensuring that responses are:

• Strict on-domain;
• Grounded in known commercial truth;
• Transaction-aware and outcome-driven; and
• Governed by embedded compliance, brand-safety and policy controls

Rezolve’s Ai does not speculate or improvise. If information is not known, relevant or permitted, the system is designed not to answer.

“Commerce AI must be boring in all the right ways,” Wagner added. “It must know what not to talk about. If an AI system can hallucinate, it has no place anywhere near a checkout, a payment flow or a global brand.”

As enterprises move from experimentation to scaled deployment, Rezolve Ai believes the market is now drawing a clear line between AI theatre and production-grade infrastructure.

Rezolve Ai continues to see an accelerating demand from global retailers and enterprises seeking controlled, proprietary, non-hallucinatory AI systems capable of operating reliably in live commercial environments.

About Rezolve Ai

Rezolve Ai (NASDAQ: RZLV) (the “Company”) is an industry leader in AI-powered solutions, specializing in enhancing customer engagement, operational efficiency, and revenue growth. The Company’s “Brain Suite” is the world’s first enterprise AI platform built for Agentic Commerce, delivering advanced tools that harness artificial intelligence to power search, transact, fulfill, and personalize at global scale. For more information, visit www.rezolve.com.

Media Contact

Rezolve Ai
Urmee Khan - Global Head of Communications
urmeekhan@rezolve.com
+44 7576 094 040
 investors@rezolve.com 

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1996. The actual results of Rezolve AI plc (“Rezolve”) may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect”, “estimate”, “project”, “budget”, “forecast”, “anticipate”, “intend”, “plan”, “may”, “will”, “could”, “should”, “believes”, “predicts”, “potential”, “continue”, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. You should carefully consider the risks and uncertainties described in the “Risk Factors” section of Rezolve’s Annual Report on Form 20-F and its subsequent filings made with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Most of these factors are outside Rezolve’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) competition, the ability of Rezolve to grow and manage growth profitably, and retain its management and key employees; (2) changes in applicable laws or regulations; and (3) weakness in the economy, market trends, uncertainty and other conditions in the markets in which Rezolve operates, and other factors beyond its control, such as inflation or rising interest rates. Rezolve cautions that the foregoing list of factors is not exclusive and not to place undue reliance upon any forward-looking statements, including projections, which speak only as of the date made. Except as required by applicable law, Rezolve does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise.