The U.S. Federal Trade Commission (FTC) has initiated an investigation into OpenAI’s ChatGPT.
This inquiry arises from concerns about potential violations of consumer protection laws, specifically in terms of causing reputational damage or infringing upon privacy.
This move follows a series of legal issues surrounding the company’s AI model.
The investigation is said to be triggered by a defamation lawsuit filed by a Georgia radio host against OpenAI, alleging that ChatGPT had damaged his reputation by falsely linking him to criminal activities.
Additionally, in April, an Australian mayor threatened OpenAI with a similar lawsuit after the model seemingly implicated him in a foreign bribery scandal.
The Regulatory Spotlight
Given these events, the FTC has requested increased transparency from OpenAI. The agency has issued a 20-page Civil Investigative Demand letter seeking detailed information on the company’s operations.
The letter has requested OpenAI to submit various company documents dating back to 2017, including contracts with partners.
The FTC is seeking insights into the marketing and training of OpenAI’s AI model, as well as its risk assessment strategies.
Additionally, the commission has expressed interest in OpenAI’s privacy mitigation measures, data collection methods, and information on API and plugin integrations.
In addition, it has asked for internal communications that discuss the potential of AI models to produce inaccurate statements about individuals or reveal personal information.
While the FTC and OpenAI have refrained from commenting on the matter, FTC Chair Lina Khan highlighted the need to regulate AI software.
When speaking before the US House oversight committee, she stated that the Commission was committed to promoting fair competition while protecting Americans from any unethical practices.
Legal Quandary And Market Potential
OpenAI has previously been the target of multiple lawsuits over copyright violations. The accusations suggest that the AI models were trained on copyrighted materials. The tech giant, alongside Microsoft, is also currently embroiled in a lawsuit alleging privacy violations.
Despite the legal complexities and uncertainties surrounding the AI model, there is still significant potential for economic growth in the sector.
Microsoft has been integrating OpenAI’s models into its software infrastructure, reflecting the tech industry’s growing enthusiasm for AI applications.
Microsoft’s commercial release of the OpenAI-powered Copilot from GitHub showcases OpenAI’s influence. Further evidence lies in Bing’s search engine, which has incorporated the ChatGPT/GPT-4 model.
However, OpenAI CEO Sam Altman voiced concerns in a Senate Judiciary Committee meeting in May, warning that regulating this technology could prove challenging.
Altman stated that while AI regulation was essential, it should be balanced to ensure safety while still allowing access to the technology’s benefits. It appears, however, that this FTC investigation was not what he had anticipated.
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