FTC Investigating ChatGPT Creator OpenAI over Consumer Protection Issues

The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)
The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)
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FTC Investigating ChatGPT Creator OpenAI over Consumer Protection Issues

The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)
The ChatGPT app is displayed on an iPhone in New York, May 18, 2023. (AP)

The US Federal Trade Commission has launched an investigation into ChatGPT creator OpenAI and whether the artificial intelligence company violated consumer protection laws by scraping public data and publishing false information through its chatbot.

The agency sent OpenAI a 20-page letter requesting detailed information on its AI technology, products, customers, privacy safeguards and data security arrangements.

An FTC spokesperson had no comment on the investigation, which was first reported by The Washington Post on Thursday.

The FTC document the Post published told OpenAI that the agency was investigating whether it has “engaged in unfair or deceptive privacy or data security practices” or practices harming consumers.

OpenAI founder Sam Altman tweeted disappointment that the investigation was disclosed in a “leak,” noting that would “not help build trust,” but added that the company will work with the FTC.

“It’s super important to us that out technology is safe and pro-consumer, and we are confident we follow the law,” he wrote. “We protect user privacy and design our systems to learn about the world, not private individuals.”

OpenAI has faced scrutiny elsewhere. Italian regulators temporarily blocked ChatGPT over privacy concerns, and privacy watchdogs in France, Spain, Ireland and Canada also are paying closer attention, including some that have launched investigations after receiving complaints.

The FTC's move is a serious regulatory threat to the nascent but fast-growing AI industry, although it's not the only challenge facing these companies.

Comedian Sarah Silverman and two other authors have sued both OpenAI and Facebook parent Meta for copyright infringement, claiming that the companies' AI systems were illegally “trained” by exposing them to datasets containing illegal copies of their works.

On Thursday, OpenAI and The Associated Press announced a deal under which the AI company will license AP’s archive of news stories.

Altman has emerged as a global AI ambassador of sorts following his testimony before Congress in May and a subsequent worldwide tour, including to Europe, where officials are putting the final touches on the world's first comprehensive rules for AI.

The regulations will focus on risky uses such as predictive policing and social scoring and include provisions for generative AI to disclose any copyright material used to train its algorithms.

Altman himself has called for AI regulation, although he has tended to emphasize difficult-to-evaluate existential threats such as the possibility that superintelligent AI systems could one day turn against humanity.

Some argue that focusing on a far-off “science fiction trope” of superpowerful AI could make it harder to take action against already existing harms that require regulators to dig deep on data transparency, discriminatory behavior and potential for trickery and disinformation.

“It’s the fear of these systems and our lack of understanding of them that is making everyone have a collective freak-out,” Suresh Venkatasubramanian, a Brown University computer scientist and former assistant director for science and justice at the White House Office of Science and Technology Policy, told the AP in May. “This fear, which is very unfounded, is a distraction from all the concerns we’re dealing with right now.”

News of the FTC's OpenAI investigation broke just hours after a combative House Judiciary Committee hearing in which FTC Chair Lina Khan faced off against Republican lawmakers, who said she has been too aggressive in pursuing technology companies over allegations of wrongdoing.

Republicans said she has been harassing Twitter since its acquisition by Elon Musk, arbitrarily suing large tech companies and declining to recuse herself from certain cases. Khan pushed back, arguing that more regulation is necessary as the companies have grown and that tech conglomeration could hurt the economy and consumers.



South Korea's SK Hynix to Invest $64 Billion in Memory Chip Plants

FILE PHOTO: The SK Hynix logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/File Photo
FILE PHOTO: The SK Hynix logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/File Photo
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South Korea's SK Hynix to Invest $64 Billion in Memory Chip Plants

FILE PHOTO: The SK Hynix logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/File Photo
FILE PHOTO: The SK Hynix logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/File Photo

SK Hynix said it would invest 100 trillion won ($64.38 billion) to build new chip plants, including one for NAND flash memory, as part of a massive South Korean investment drive aimed at spreading returns from the AI boom beyond Seoul.

The projects in the central city of Cheongju outlined on Thursday are included in a broader $2.1 trillion plan unveiled by the chipmaker and its local rival Samsung Electronics this week that also included a new chip cluster in the southwest and existing projects.

The huge capacity buildout by the South Korean chipmakers is a major political win for the country's President Lee Jae Myung, who wants the AI windfall to help revive economies beyond ⁠the Seoul metropolitan area, ⁠though it is stoking fears of a painful reckoning if AI spending cools.

At an event on Thursday attended by Lee, SK Hynix CEO Kwak Noh-jung said the company would spend 80 trillion won to build a new factory for NAND memory chip production by 2029 and 20 trillion won for a chip packaging plant by late 2027 in Cheongju.

The plan to invest 100 trillion won in Cheongju was announced on Monday, but details of the investment were not provided at the time, Reuters reported.

South Korea is hoping the investments will ⁠double the country's memory chip production capacity within five years. Samsung and SK Hynix are the world's largest manufacturers of memory chips alongside US rival Micron.

The investments come as demand from AI hyperscalers has caused a global shortage of all types of memory chips. Prices for both NAND flash memory, a storage chip that retains data even when a device is turned off, and DRAM have soared to historical highs.

SK Hynix shares ended down 15% and Samsung shares closed 9% lower on Thursday, hit by a global selloff in chipmakers as Meta Platforms' plan to sell computing power raised questions over excess AI computing capacity.

Michael Burry, the investor whose successful bets against the US housing market in 2008 were recounted in the movie "The Big Short," expressed caution about the massive South Korean investment plan in a subscriber-only Substack ⁠newsletter on Tuesday, the Wall ⁠Street Journal reported.

The investment drive set off alarm bells for Burry over whether the massive sums of money being poured into AI could ever generate appropriate returns, according to the report, which added that he had made more bearish bets against AI-related stocks.

"I see that as the beginning of the end," he told subscribers.

At the SK Hynix event, Kwak expressed confidence in AI-driven demand for chips.

"While demand for NAND has been increasing and is expected to continue growing in the future, NAND supply is constrained," he said.

SK Hynix said it planned to start construction of the new Cheongju NAND factory, known as M17, next year.

In April, SK Hynix broke ground on the P&T7 fab at Cheongju, a dedicated advanced packaging facility for AI memory, including high-bandwidth memory.

However, the company cautioned in a filing this week that the long-term investment plans could change depending on global chip demand and spending by major customers.

Factors such as delays in selecting and securing construction sites could also cause it to postpone plans, it added.


Microsoft Partners with Singapore's Lightstorm to Build India-Southeast Asia Undersea Cable

FILED - 30 January 2026, Bavaria, Munich: FILE PHOTO - The Microsoft logo can be seen on the Microsoft Germany headquarters building in Munich. Photo: Sven Hoppe/dpa
FILED - 30 January 2026, Bavaria, Munich: FILE PHOTO - The Microsoft logo can be seen on the Microsoft Germany headquarters building in Munich. Photo: Sven Hoppe/dpa
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Microsoft Partners with Singapore's Lightstorm to Build India-Southeast Asia Undersea Cable

FILED - 30 January 2026, Bavaria, Munich: FILE PHOTO - The Microsoft logo can be seen on the Microsoft Germany headquarters building in Munich. Photo: Sven Hoppe/dpa
FILED - 30 January 2026, Bavaria, Munich: FILE PHOTO - The Microsoft logo can be seen on the Microsoft Germany headquarters building in Munich. Photo: Sven Hoppe/dpa

A consortium including Microsoft and telecom startup Lightstorm plans to build a new undersea cable linking India with Malaysia and Singapore as technology firms compete to expand AI and cloud infrastructure in India, one of the world's fastest-growing data markets.

The consortium, whose other members include Tata Communications , Singapore Telecommunications, Singapore's ASEAN Cableship and Japan's NEC Corporation, will construct the I-2SEA cable to support AI, cloud and hyperscale workloads, Reuters quoted the companies as saying on Thursday.

They did not provide additional details including the investment ⁠size.

The network will ⁠span 3,600 km and have landing stations in Machilipatnam in the southern Indian state of Andhra Pradesh, where Meta and Alphabet have announced data centers.

The cable is expected to be operational in the fourth quarter of 2029, Lightstorm Group CEO and Managing ⁠Director Amajit Gupta told Reuters in an interview.

The I Squared-backed company currently connects 19 AI and cloud zones across India through terrestrial fiber cable networks, with the new network expected to bring this number up to 29, Gupta said.

India's operational data center capacity could double from the current 1.4 gigawatts by 2027, based on projects under construction, and increase five-fold by 2030 if planned projects are fast-tracked, Macquarie Equity Research ⁠said in ⁠a report last October.

Undersea cables carry roughly 95% of the world's internet traffic. India currently has 17 active submarine cables with a maximum potential capacity of 960 terabits per second, and at least 10 more have been publicly announced, according to TeleGeography, a telecommunications research firm.

Separately, Lightstorm plans to list in India in mid-2027, Gupta said, without disclosing any other details. The company was seeking a valuation of up to $1.5 billion in March, according to a media report.


EU Top Court to Rule on Record 4.1 bn Euro Google Fine

A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)
A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)
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EU Top Court to Rule on Record 4.1 bn Euro Google Fine

A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)
A pedestrian walks past the Google offices in London, Britain, August 14, 2025. (Reuters)

The EU's top court will decide Thursday whether to uphold a record 4.1 billion euro ($4.7 billion) fine the bloc slapped on Google for anti-competitive practices related to its Android operating system.

It is the second attempt by the US tech giant to overturn the penalty imposed by the European Commission in 2018 -- which remains the bloc's highest ever antitrust fine, said AFP.

The commission, the EU's antitrust regulator, had accused Google of abusing the popularity of its Android operating system to restrict competition.

It alleged Google pressured phone makers using Android to pre-install its search engine and Google Chrome browser -- essentially shutting out rivals -- and ordered it to pay a 4.3-billion-euro fine.

The findings were upheld in 2022 by the General Court, the EU's second-highest. But the Luxembourg-based body slightly reduced the levy to 4.1 billion euros -- still the EU's biggest ever.

Google filed a new challenge arguing before the bloc's top court, the European Court of Justice, that the case was unfounded and that the sanction penalized innovation.

In first instance, the firm had pushed the case that the EU was unfairly blind to practices by Apple, which gives preference to its own services, such as Safari on iPhones.

It also argued that customers were in no way forced to use its products on Android and that downloading competing apps was just a tap away.

But it suffered a legal blow in June last year when the EU top court's adviser recommended upholding the fine in an opinion, describing Google's arguments as "ineffective".

- Legal battles -

Although not binding, such advice carries weight and is often followed by EU judges in their rulings.

The case is one in a series pitting Google against Brussels.

As part of a major push to target big tech abuses, the EU slapped the Mountain View company with fines worth a total of 8.2 billion euros between 2017 and 2019 over antitrust violations.

This set off a series of long-running legal battles.

Brussels has since armed itself with a more powerful legal weapon known as the Digital Markets Act (DMA), to rein in tech giants.

Rather than regulators discovering antitrust violations after probes lasting many years, the DMA gives businesses a list of what they can and cannot do online.

Google is already the subject of several formal DMA probes, and was hit with a massive 2.95 billion euro fine in September in another competition case predating the digital law for favoring its own advertising services.

That drew an angry rebuke from US President Donald Trump who has accused Brussels of unfairly targeting American firms, and repeatedly threatened to impose retaliatory tariffs on EU exports.