WASHINGTON: The US Federal Trade Commission (FTC) has opened an investigation into OpenAI on claims it has run afoul of consumer protection laws by putting personal reputations and data at risk, the strongest regulatory threat to the Microsoft-backed startup yet.
The FTC this week sent a 20-page demand for records about how OpenAI – the maker of generative artificial intelligence chatbot ChatGPT – addresses risks tied to its AI models.
The agency is probing if OpenAI engaged in unfair practices that resulted in “reputational harm” to consumers.
The investigation marks another high-profile effort to rein in technology companies by the FTC's progressive chair, Lina Khan, days after the agency suffered a big loss in court in its fight to stop Microsoft from buying Activision Blizzard . The FTC said it would appeal the court decision.
Khan addressed a congressional committee hearing on Wednesday, and while she did not mention the investigation, she told lawmakers that her agency had concerns about ChatGPT's potentially libellous output.
“We’ve heard about reports where people’s sensitive information is showing up in response to an inquiry from somebody else,” she said.
“We’ve heard about libel, defamatory statements, flatly untrue things that are emerging. That’s the type of fraud and deception that we are concerned about,” she added.
One of the questions FTC has asked OpenAI pertains to steps the company has taken to address its products’ potential to “generate statements about real individuals that are false, misleading, or disparaging”.
The Washington Post was the first to report the probe. The FTC declined comment, while OpenAI did not respond to a request for comment.
OpenAI CEO Sam Altman said in a series of tweets on Thursday that the latest version of the company's technology, GPT-4, was built on years of safety research and the systems were designed to learn about the world and not private individuals.
“Of course we will work with the FTC,” he said.
OpenAI launched ChatGPT in November, enthralling consumers and fuelling one-upmanship at large tech companies to showcase how their AI-imbued products will change the way societies and businesses operate.
The AI race has raised widespread concerns about potential risks and regulatory scrutiny of the technology.
Global regulators are aiming to apply existing rules covering everything from copyright and data privacy to two key issues: the data fed into models and the content they produce, Reuters reported in May.
OpenAI's release of ChatGPT last November stunned the world as it displayed the power of large language models (or LLM), a form of artificial intelligence known as generative AI that can churn out human-like content in just seconds.
Amid the marvel at the technology’s capacities, reports came in that the models could also churn out offensive, false or just strange content, sometimes called “hallucinations.”
An FTC probe does not necessarily bring further action and the regulator can close the case if it is satisfied by the target company's answer.
If the FTC perceives illegal or unsafe practices, it will demand remedial action and possibly launch a lawsuit. – Reuters, AFP
