OpenAI, the creator of the AI chatbot ChatGPT, is reportedly facing an investigation by the Federal Trade Commission (FTC) over its privacy and data practices. According to The Washington Post, OpenAI has received a criminal investigative demand (CID) from the FTC, which is similar to a subpoena and requires compliance with information requests.
The FTC is looking into OpenAI’s potential use of unfair or deceptive privacy or data security practices and unfair or deceptive practices relating to risks of harm to consumers, including reputational harm. The CID suggests that the agency is considering the imposition of a monetary penalty if the alleged practices are found to be against the public interest.
The 20-page document includes 49 detailed questions and requests for 17 categories of documents related to the investigation. OpenAI has been given a 14-day deadline to contact an FTC counsel to discuss how it plans to address the agency’s demands.
Among the questions raised in the CID are inquiries about the specific large language models used in OpenAI’s products, their application, training methodologies, and mechanisms to ensure accuracy. The document also covers advertising policies, risk assessments, personal information collection and protection, determination of public figure status, and procedures for handling feedback and complaints.
OpenAI’s introduction of the Microsoft-backed ChatGPT on November 30 garnered significant attention in the IT industry. Its powerful capabilities raised concerns about potential implications, leading to investigations in many countries. A letter signed by 2,600 tech figures, including Elon Musk and Steve Wozniak, called for a halt on AI development. OpenAI CEO Sam Altman also testified on AI safety before the United States Senate.
In addition to the FTC investigation, OpenAI has faced legal challenges. In June, a class action lawsuit was filed accusing the company of unauthorized scraping of personal data. Popular authors Mona Awad and Paul Tremblay also filed a copyright infringement suit against OpenAI, and comedian Sarah Silverman, along with two other authors, sued OpenAI and Meta, alleging the use of illegal shadow libraries in training their AI.
These investigations and legal proceedings have significant implications not only for OpenAI but also for the broader AI industry. It remains to be seen how the company will navigate these challenges.
In other news, the United States Department of Justice (DoJ) recently moved $299 million worth of Bitcoin in a series of transactions. The approval of a Bitcoin exchange-traded fund (ETF) by the government could serve as a seal of approval for the cryptocurrency industry.
