OpenAI faces FTC investigation over ChatGPT’s potential to harm consumers

Devesh Beri

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As reported by The Washington Post, the Federal Trade Commission (FTC) has launched a wide-ranging investigation into OpenAI, the creator of the popular ChatGPT bot, to determine if the company has violated consumer protection laws by jeopardizing personal reputations and data. In a 20-page demand for records, the FTC seeks information on how OpenAI addresses risks associated with its AI models. OpenAI’s ChatGPT has been hailed as the fastest-growing consumer app ever, prompting competition among Silicon Valley firms to release competing chatbots. The investigation marks a significant regulatory threat to OpenAI as the company seeks to shape the future of AI policy globally.

In the other news, FTC appeals court decision to block its preliminary injunction against Microsoft and Activision.

Microsoft announced a multi billion dollar partnership extension with OpenAI in January, and in February released previews of Bing Chat, based on an extension of ChatGPT.

The FTC’s actions highlight its commitment to AI regulation, with warnings about enforcing existing consumer protection laws. OpenAI is also requested to share research, testing, and surveys that evaluate consumer understanding of the accuracy and reliability of its AI tools. The FTC’s focus on fabrications stems from reports of ChatGPT producing incorrect information that could harm individuals’ reputations. The agency is seeking extensive information about OpenAI’s products, advertising practices, release policies, and safety measures. Details about the training data used, refinement processes, and the March security incident are also requested.

While the U.S. has lagged behind other countries in AI legislation and privacy regulation, there is a growing effort in Washington to catch up. Senate Majority Leader Charles E. Schumer recently hosted a briefing with officials from the Pentagon and intelligence community to discuss the national security risks of AI. Vice President Harris also hosted a discussion on AI safety and security risks. Both policymakers emphasized the importance of balancing innovation with consumer protection.

As OpenAI and the FTC have not yet responded to requests for comment, the investigation’s potential impact on OpenAI’s business and the outcomes of the probe remain uncertain. However, the investigation marks a significant regulatory challenge for OpenAI and underscores the growing scrutiny of AI technology by government authorities.

via SeekingAlpha