Friday, November 28, 2025
As the artificial intelligence (AI) sector expands into a multi-trillion-dollar industry, it is also confronting significant legal challenges. A notable case is unfolding in federal court in Rhode Island, where Dr. Bhargav Patel, a pediatric psychiatrist at Brown University Health, has filed a lawsuit against AI company Sully.AI and several of its executives. The lawsuit, initiated this week, highlights allegations of wrongful termination, wage disputes, and potential violations of health regulations.
According to the suit, Patel asserts that the defendants are involved in developing and marketing AI-powered medical software designed to enhance physician efficiency in healthcare settings. Sully.AI, which operates under various business names and is registered in Delaware while headquartered in California, claims to serve over 100,000 providers.
Patel’s legal complaint details his recruitment by Sully.AI, where promises were made regarding fair compensation. After joining the company as Chief Medical Officer and performing a range of duties, he alleges he went months without pay and was misclassified as an independent contractor. Patel claims that he was terminated after raising concerns about the company’s compliance with laws regarding medical software, specifically referencing FDA and HIPAA standards.
The lawsuit describes how Patel was initially recruited in March 2024, with assurances from executives, including COO Ahmed Nasser, that he would be compensated fairly. For approximately eight months, Patel claims he worked between five and ten hours weekly without remuneration, contributing significantly to the firm’s operations and revenue generation. His duties included designing advertising materials, consulting on the company’s platform, and facilitating clinic subscriptions that generated over $15,000 in annual revenue.
Although he was eventually hired as a Medical Director in late 2024, compensation was still minimal, amounting to $5,000 per month without benefits. It was not until January 2025 that Patel was compensated as a W-2 employee, receiving the same monthly salary plus benefits and equity options valued at around $30,000. By July 2025, he was promoted to Chief Medical Officer with a salary increase to $14,000 per month and equity worth approximately $250,000.
The lawsuit takes a critical turn when it addresses allegations that Sully.AI misrepresented its products to prospective clients. Patel claims that during a sales call in August 2025, executives misled a hospital representative by stating that their AI radiology product was FDA approved, despite Patel’s awareness that it was not. Following this incident, Patel raised concerns internally about the misleading claims, which he viewed as potentially criminal and damaging to the company’s legal standing.
Patel’s actions led to escalating tensions within the company, culminating in his dismissal, which he claims was retaliatory in nature. He is now categorizing himself as a whistleblower, asserting that his termination was in direct response to his efforts to ensure compliance with federal laws regarding medical software.
The legal complaint seeks back wages and damages, articulating multiple grievances against the defendants. As the case progresses, it not only underscores the complexities of the burgeoning AI healthcare sector but also raises questions about corporate accountability and employee rights in a rapidly evolving market.
Efforts to obtain a comment from Sully.AI went unanswered at the time of publication, leaving the future implications of this legal battle uncertain as it unfolds in the public eye.
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