The Need for Generative AI Development Policies and the FTC’s Investigative Demand to OpenAI

Sheppard Mullin Richter & Hampton LLP
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Sheppard Mullin Richter & Hampton LLP

The Federal Trade Commission (FTC) has been active in enforcements involving various AI-related issues. For an example, see Training AI Models – Just Because It’s “Your” Data Doesn’t Mean You Can Use It and You Don’t Need a Machine to Predict What the FTC Might Do About Unsupported AI Claims. The FTC has also issued a report to Congress (Report) warning about various AI issues. The Report outlines significant concerns that AI tools can be inaccurate, biased, and discriminatory by design and can incentivize relying on increasingly invasive forms of commercial surveillance. Most recently, the FTC instituted an investigation into the generative AI (GAI) practices of OpenAI through a 20 page investigative demand letter (Letter).

These enforcements, the Report and the Letter highlight some reasons why companies developing AI need comprehensive policies and procedures to guide that development. For more information on how to develop these policies and what they should include, see here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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