Regulators Crackdown on Generative AI

In a world where artificial intelligence (AI) is increasingly becoming a part of our everyday lives, the question of regulation has become a hot topic. As reported by Fox Business, AI companies are already facing a crackdown on multiple fronts that could shape guardrails with no action from Capitol Hill.

The rise of powerful new generative artificial intelligence (GenAI) tools like OpenAI’s ChatGPT has sparked both excitement over the possibilities the technology can bring and concerns over its risks. The Federal Trade Commission (FTC) has recently opened a probe into OpenAI over whether its products have violated consumer protection or data privacy laws, threatening to fine the company.

Regulation Without Congress

While Congress deliberates on how (or if) it can regulate the rapidly developing technology at the national level, AI companies are already facing regulatory scrutiny. Almost as soon as ChatGPT’s learning language model (LLM) became available to the public late last year, it was met with immediate concerns over privacy, copyright infringement, and data protection, setting off a slew of other legal alarm bells.

Within months, multiple federal agencies began saber-rattling over how they could use laws that were already on the books to take action against AI firms. This week, the FTC became the first to go on the record with an official move, opening a probe into OpenAI.

Legal Battles and Future Regulations

Lawsuits over AI began to fly even before the FTC’s investigation hit news. Comedian Sarah Silverman and two novelists filed a proposed class action against OpenAI and Facebook parent Meta earlier this week for allegedly using their content without permission to train chatbots.

Christine Lyon, global co-head of data privacy and security at law firm Freshfields, suggests that after the FTC takes action like it did with OpenAI, state attorneys general may also become interested because they have similar state consumer protection laws they can invoke for privacy and data security.

There’s no telling yet if or when Congress might take any action, but companies can soon expect to face regulations from overseas. The European Union is racing ahead with an AI act, which has to be on the radar of American AI firms because it has become increasingly difficult for U.S. companies to avoid being regulated by the EU if they do business in any of the member countries or offer services to their citizens.

AI: A Double-Edged Sword

The potential for generative AI is so huge, that there will be an appetite to be willing to fight for this, to be able to try to overcome these cases, to get them dismissed or settled. However, all the court actions will probably lead to more support for regulation.

It is very difficult to predict whether Congress could align on a regulatory framework for AI, noting that lawmakers have tried for over a decade to come up with a federal privacy law but have so far been unsuccessful. The balance between the benefits and harms of AI is a delicate one, and it requires careful thought and consideration.

As AI continues to evolve and become more integrated into our lives, the need for regulation becomes increasingly apparent. The actions of the FTC and other regulatory bodies serve as a reminder that while AI holds great promise, it also presents significant challenges that must be addressed.

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