OpenAI, the San Francisco-based AI powerhouse, is facing a series of challenges that have put the company under immense pressure. Copyright infringement lawsuits, increased competition, and now regulatory scrutiny from the US Federal Trade Commission (FTC) are testing the resilience of the AI-focused start-up.
The latest blow to OpenAI comes in the form of an in-depth investigation by the FTC, aimed at assessing how the company addresses consumer risks associated with AI. In a document obtained by The Washington Post, the FTC specifically requests detailed descriptions of any complaints received regarding OpenAI’s ChatGPT and other AI products making false, misleading, disparaging, or harmful statements about individuals. The investigation seeks to determine if OpenAI engaged in unfair or deceptive practices that may have resulted in reputational harm to consumers, and whether obtaining monetary relief would be in the public interest.
This investigation by the FTC follows a call earlier this year from the US policy think tank Center for AI and Digital Policy, which urged the FTC to investigate OpenAI and temporarily halt the release of GPT models until proper safeguards are established. Center for AI and Digital Policy emphasized the importance of aligning OpenAI’s practices with established guidance and norms for AI governance.
The FTC’s document, spanning 20 pages, poses numerous inquiries to OpenAI regarding its management of AI and related aspects. The investigation adds to the legal woes faced by OpenAI, as the company is already grappling with a major class-action lawsuit filed by a US law firm. The lawsuit alleges that OpenAI violated the rights of millions by scraping the internet to train ChatGPT. Microsoft, which has made substantial investments in OpenAI, is also named in the complaint.
Despite these legal challenges, demand for OpenAI’s services continues to soar, and businesses and consumers are eagerly embracing the potential of AI. OpenAI recently expanded its operations by establishing its first corporate office outside the US in London.
OpenAI’s CEO, Sam Altman, has been calling for increased regulation to address the concerns surrounding artificial intelligence. However, as the company faces mounting regulatory scrutiny, Altman’s task of appeasing governments becomes increasingly challenging.
While OpenAI grapples with multiple legal and regulatory battles, it remains one of the fastest-growing AI apps, testament to the growing demand for the technology and the potential it holds for various industries.
