OpenAI, a leader in AI technology, is back in the spotlight after German authorities launched an inquiry into their privacy practices and compliance with the General Data Protection Regulation (GDPR). The GDPR requires companies to effectively protect user data, in many cases this means the company must obtain explicit consent from the individual for the processing of personal data. Marit Hansen, commissioner for the northern state of Schleswig-Holstein, told AFP reporters that regulators in Germany “want to know if a data protection impact assessment has been carried out and if the data protection risks are under control.” German watchdogs have raised additional scrutiny, and it adds to the complicated situation for OpenAI.
OpenAI debuted the GPT-4 model in mid-March, but has since faced increasing scrutiny, especially from European regulators. Italy was the first Western country to put a ban on GPT-4 products. OpenAI has to prove they can obey GDPR requirements and Italian privacy laws, and will have to give clear answers to German regulators by June 11th. At the core of the matter is the training data used to build the GPT AI models. People cannot give their consent to have their data used, nor can they correct the models if they make an error.
This is concerning particularly to OpenAI subscribers and other organizations using software built on the API for cryptocurrency trading bots or analysis. These organizations have to be very cautious of any bans for the EU or litigation, as it could last beyond the business operations and cause losses beyond measure. OpenAI has yet to comment on their plans, but will be under intense pressure from regulative bodies if their plans falter in meeting the GDPR standards.
OpenAI is an AI research laboratory that creates technologies related to artificial intelligence. The company is based in San Francisco and is backed by venture capitalist heavyweights such as Reid Hoffman, Peter Thiel and Elon Musk. Founded in 2015, the company has made huge leaps in AI research, developing such technologies as GPT-3, the world’s most powerful language model. The company has hundreds of employees and collaborations with top universities worldwide.
Marit Hansen is a data protection commissioner of northern Germany’s Schleswig-Holstein. She has acted as a spokesperson for many data protection initiatives and is renowned for her work in raising the bar for data protection in all of Europe. Hansen has worked in the data protection space for over a decade, and is currently leading the charge in the fight against OpenAI for GDPR compliance.
