The rapid growth of artificial intelligence (AI) technologies has changed decision-making in many fields. But, it has also raised major privacy and ethical concerns. However, many AI incidents taxonomies and guidelines for academia, industry, and government lack grounding in real-world incidents. We analyzed 202 real-world AI privacy and ethical incidents. This produced a taxonomy that classifies incident types across AI lifecycle stages. It accounts for contextual factors such as causes, responsible entities, disclosure sources, and impacts. Our findings show insufficient incident reporting from AI developers and users. Many incidents are caused by poor organizational decisions and legal non-compliance. Only a few legal actions and corrective measures exist, while risk-mitigation efforts are limited. Our taxonomy contributes a structured approach in reporting of future AI incidents. Our findings demonstrate that current AI governance frameworks are inadequate. We urgently need child-specific protections and AI policies on social media. They must moderate and reduce the spread of harmful AI-generated content. Our research provides insights for policymakers and practitioners, which lets them design ethical AI. It also support AI incident detection and risk management. Finally, it guides AI policy development. Improved policies will protect people from harmful AI applications and support innovation in AI systems.

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