WASHINGTON DC, USA – The US’s Federal Trade Commission (FTC) has initiated an investigation into OpenAI, the artificial intelligence startup behind ChatGPT, over allegations of consumer harm via data collection and false information dissemination.
In a 20-page letter sent to OpenAI, the FTC requested the San Francisco-based startup to answer a myriad of questions regarding their AI training models, data privacy practices, and security measures.
The letter indicates that the FTC is probing whether OpenAI “engaged in unfair or deceptive privacy or data security practices or engaged in unfair or deceptive practices relating to risks of harm to consumers.”
OpenAI, among the most prominent AI companies, faces its first major U.S. regulatory hurdle with this investigation. The development underscores the increasing attention given to AI technologies, particularly as their usage becomes more widespread across various sectors.
OpenAI’s CEO, Sam Altman, has previously acknowledged the need for regulatory oversight in the fast-growing AI industry.
He has appeared in Congressional hearings to endorse AI legislation and has interacted extensively with lawmakers to help shape policy for the technology.
The AI landscape is expanding, with notable developments like ChatGPT, Microsoft’s Bing, Google’s Bard, and Baidu’s Ernie.
Despite their different functionalities, all these AI systems have raised concerns over accuracy and privacy, issues that are now coming to the fore in regulatory discussions.
OpenAI has faced regulatory scrutiny abroad as well. In March, Italy’s data protection authority banned ChatGPT, citing unlawful collection of personal data and a lack of an age-verification system.
OpenAI restored access the following month after implementing the required changes.
FTC Chair, Lina Khan, has advocated for the regulation of tech companies during their nascent stages, rather than when they become fully matured.
She underscored this viewpoint in a House Judiciary Committee hearing on Thursday, expressing concern over the lack of checks on the type of data fed into these AI systems. Khan has cited reports of sensitive information appearing within AI outputs.
The FTC’s investigation could potentially force OpenAI to disclose more about its AI training and data sourcing methodologies.
While OpenAI used to be quite open about this information, it has been less forthcoming recently, likely due to concerns about competition and potential legal disputes.
Chatbots represent a significant change in how software is developed and utilized, with implications for search engines, digital assistants, and email services.
AI systems like ChatGPT have demonstrated impressive capabilities, such as answering complex questions and generating creative content.
However, the blending of fact and fiction in AI outputs, sometimes referred to as “hallucination,” has raised concerns.
The Center for AI and Digital Policy, an advocacy group for ethical technology use, had previously requested the FTC to halt OpenAI from releasing new commercial versions of ChatGPT. The organization cited bias, disinformation, and security concerns.
OpenAI has been working to refine ChatGPT, attempting to decrease instances of biased, false, or harmful output. The company utilizes a technique called reinforcement learning, using ratings on the chatbot’s responses to better define its behavior.
The FTC investigation, expected to take several months, may lead to depositions of OpenAI executives.
However, some experts, like former FTC staff member Megan Gray, express skepticism over the agency’s technical capacity to evaluate OpenAI’s practices fully.
It remains to be seen what consequences, if any, will emerge from this investigation.
