Rezolve AI (NASDAQ: RZLV) plunges 8.33% after warning on generic LLM chatbot risks in enterprise settings

Rezolve AI (NASDAQ: RZLV) plunged 8.33% in pre-market trading on Dec. 19, 2025, following a public warning from the company about the risks of generic large language model (LLM) chatbots in enterprise settings. The decline came amid revelations that chatbots powered by third-party LLMs have repeatedly failed to adhere to brand safety protocols, sparking incidents involving sensitive topics such as Nazi references, sex toys, and drug-related queries.

The company highlighted a recent case where a chatbot deployed by The Gap, Inc. responded inappropriately to user prompts, prompting an apology from Sierra AI’s CEO. Rezolve AI’s CEO Daniel M. Wagner criticized the use of generic LLMs in commerce, calling such failures “design flaws” rather than isolated incidents. The firm emphasized that probabilistic, hallucination-prone models are ill-suited for environments requiring precision and compliance, contrasting its own proprietary “Brain Suite” platform, which operates within verified, deterministic data domains to avoid speculative outputs.

Rezolve AI’s stance reflects growing scrutiny over enterprise AI deployments, as brands seek solutions to mitigate reputational risks. The company reported rising demand for its non-hallucinatory, commerce-native systems, which prioritize transactional accuracy and embedded compliance controls. Despite the pre-market slump, the firm remains focused on expanding its Agentic Commerce infrastructure, positioning itself as a provider of “production-grade” AI amid industry-wide challenges in scaling reliable AI tools.

Despite the current stock volatility, Rezolve AI remains committed to innovation and enterprise safety. The company is investing heavily in refining its deterministic AI systems, which it claims offer a safer alternative to probabilistic models that rely on large-scale, unverified data. This strategy is expected to strengthen its market position as more companies seek to reduce liability in AI-generated outputs.

Looking ahead, Rezolve AI aims to expand its partnerships with global brands to embed its AI infrastructure directly into commerce systems, ensuring real-time compliance and accuracy in customer interactions. The firm remains optimistic about its long-term prospects despite the recent stock decline, which it attributes to broader market sentiment and investor reaction to its risk disclosures.