FirstFT: OpenAI investigated by FTC over risks posed by ChatGPT

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Good morning. The risks posed by artificially intelligent chatbots are being officially investigated by US regulators for the first time after the Federal Trade Commission launched a wide-ranging probe into ChatGPT maker OpenAI.

In a letter sent to the Microsoft-backed company, the FTC said it would look at whether people have been harmed by the AI chatbot’s creation of false information about them, as well as whether OpenAI has engaged in “unfair or deceptive” privacy and data security practices.

Generative AI products are in the crosshairs of regulators around the world, as AI experts and ethicists warn over the enormous amount of personal data consumed by the technology, as well as its potentially harmful outputs, ranging from misinformation to sexist and racist comments. 

In its letter, the US regulator asked OpenAI to share internal material ranging from how the group retains user information to steps the company has taken to address the risk of its model producing statements that are “false, misleading or disparaging”.

The FTC declined to comment on the letter, which was first reported by the Washington Post. OpenAI declined to comment.

Here’s what else I’m keeping tabs on today and over the weekend:

• Results: JPMorgan Chase, Citigroup and Wells Fargo report second-quarter earnings, as does BlackRock.

• Narendra Modi in France: The Indian prime minister will be French president Emmanuel Macron’s guest of honour at the Bastille Day celebrations in Paris. India and France agreed to two big defence contracts ahead of the visit, which is aimed at deepening trade and diplomatic ties to counter a rising China.

• Trade deals: The UK is set to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership on Sunday, becoming the first new member since the framework went into effect. China is next on the list of applicants seeking to join the group, which was once seen as a way of balancing Beijing’s growing influence in Asia-Pacific region. (Bloomberg)

• Sport: Wimbledon women’s and men’s singles final on Sunday. Put your SW19 Grand Slam knowledge to the test in this FT Globetrotter quiz.

Five more top stories

1. Thailand’s national assembly has rejected election winner Pita Limjaroenrat’s bid to become prime minister, risking prolonged political turmoil in south-east Asia’s second-largest economy. Unelected senators chosen by the former military junta refused to vote for Pita — a Harvard-educated businessman — citing his desire to reform strict lèse majesté laws against criticism of Thailand’s monarchy. Read the full story.

2. Germany warned its companies to reduce their dependence on Beijing as it unveiled its first China strategy, emphasising the need to “de-risk” economic relations with Beijing. Foreign minister Annalena Baerbock told companies overly-dependent on China that they would “have to bear more of the financial risk themselves” in future. Here’s more on the milestone strategy.

3. Chinese tech stocks are rallying after top government officials signalled a shift from reining in the companies’ influence to helping them grow and strengthen China’s position on the world stage. Read more on the apparent end to the crackdown on Chinese tech giants.

4. Alex Mashinsky, the founder of bankrupt cryptocurrency lender Celsius Network, has been arrested by US authorities and charged with fraud and market manipulation. Prosecutors allege that Mashinsky misled investors into ploughing billions of dollars into Celsius, portraying it “as a modern day bank, where customers could safely deposit crypto assets and earn interest”.

5. One of Tesla’s biggest challengers in China has called on the US government to offer Chinese electric vehicles equal access to the American market. William Li, founder and chief executive of Shanghai-based Nio, said carmakers should not be enmeshed in political tensions between the superpowers. Read the interview.

How well did you keep up with the news this week? Take our quiz.

Explainer

While central banks in developed countries wrestle with stubbornly high inflation, China has the opposite problem — the world’s second-largest economy is flirting with deflation. With Beijing poised to unveil second-quarter gross domestic product figures on Monday, here’s why China is bucking the global inflationary trend, and what policymakers might do to keep the economy’s post-Covid recovery on track.

We’re also reading . . .

Chart of the day

China’s exports have suffered their biggest year-on-year decline since the start of the coronavirus pandemic. June exports declined 12.4 per cent year on year in dollar terms, official data showed on Thursday, the biggest drop since February 2020. Imports fell 6.8 per cent, also exceeding expectations. The data added to concerns over the growth trajectory of China’s economy.

Take a break from the news

. . . and pick up a loaf of shokupan. The Japanese sandwich bread is sweet, fluffy and lovely — with a cultural history that will make your head hurt.

Additional contributions by Tee Zhuo and Gordon Smith