US Federal Trade Commission Launches Investigation into OpenAI’s ChatGPT and DALL-E


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The US Federal Trade Commission (FTC) has initiated an investigation into OpenAI, the organization behind popular AI models ChatGPT and DALL-E, as reported by The Washington Post

Authorities are seeking documentation from OpenAI to understand how the company is addressing risks associated with large-scale language AI models amid concerns that consumer protection laws may be violated due to potential “unfair or deceptive” conduct, potentially compromising public privacy, security, and reputation.

The FTC is particularly interested in information related to a bug that exposed sensitive data of ChatGPT users, including payment and chat histories. While OpenAI has stated that the number of affected users was minimal, the FTC is concerned that this incident could stem from inadequate security practices. Additionally, the agency is requesting details of any complaints involving AI-generated false or hateful statements about individuals, as well as information about user awareness of the accuracy of the products they are utilizing.

The FTC has chosen not to comment on the matter, as is its typical practice during ongoing investigations. However, the agency previously expressed concerns that generative AI models could potentially harm consumers more than benefit them. Instances of fraud, misleading marketing campaigns, and discriminatory advertising are among the risks identified. If a company is found in violation, government agencies have the authority to impose fines or issue consent orders to enforce specific practices.

While comprehensive AI-specific laws and regulations are not expected in the near future, governments are increasing pressure on the technology industry. OpenAI CEO Sam Altman testified before the Senate in May, emphasizing the advantages of AI while outlining the company’s privacy and security measures. Altman assured that OpenAI will continue to exercise caution and enhance security measures.

Whether the FTC will extend its investigation to other generative AI developers, such as Google and Anthropic, remains uncertain. However, OpenAI’s case sets a precedent for how the FTC will approach similar investigations, highlighting regulators’ commitment to scrutinizing AI developers and ensuring consumer protection.

Vishak is a skilled Editor-in-chief at Code and Hack with a passion for AI and coding. He has a deep understanding of the latest trends and advancements in the fields of AI and Coding. He creates engaging and informative content on various topics related to AI, including machine learning, natural language processing, and coding. He stays up to date with the latest news and breakthroughs in these areas and delivers insightful articles and blog posts that help his readers stay informed and engaged.

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