OpenAI sued for unauthorized data harvesting.

OpenAI, the prominent technology company pioneering unique innovations in Artificial Intelligence (AI) has been hit with a lawsuit filed by sixteen pseudonymous individuals. The plaintiffs claim that the company’s AI products, specifically those based on ChatGPT, collected their personal information without proper notice.

The complaint, filed in a Federal Court in San Francisco, alleges that OpenAI bypassed legal means of data acquisition and instead gathered personal information without compensating the individuals involved.

Clarkson, the law firm behind the litigation claim that OpenAI’s actions infringe upon individuals’ privacy rights and intellectual property rights, as well as potentially violate copyright laws. Meanwhile, Microsoft Corp (NASDAQ: MSFT), which has made a more than $10 billion commitment to OpenAI, has also been named as a defendant in the lawsuit.

According to the complaint, Microsoft and OpenAI deviated from established protocols for the acquisition and use of personal information by resorting to theft. The lawsuit claims that OpenAI engaged in a routine scraping operation, accumulating approximately 300 billion words from various sources such as books, articles, websites, and posts.

Notably, the scraped data reportedly included personal information that had been obtained without consent from individuals. The lawsuit asserts that this acquisition method violates privacy laws and ethical data practices. In addition, the complaint noted that OpenAI disregarded the legal requirement to register as a data broker by failing to do so.

Data brokers are companies that gather, collate, and market personal data to other parties.

Furthermore, the complaint claims that OpenAI does not adequately ensure that children under 13 are prevented from accessing its tools, a criticism reminiscent of previous accusations directed at tech giants like Meta Platforms Inc (NASDAQ: META) and YouTube.

Based on the above allegations, the lawsuit requests damages amounting to $3 billion from Microsoft and OpenAI. However, it is important to recognize that this specific figure is likely a placeholder and not an actual assessment of the damages suffered.

Ongoing Investigations Associated with AI Development

The class-action lawsuit against OpenAI adds to the increasing number of legal challenges faced by companies involved in developing and profiting from AI technologies.

It reflects a broader trend where legal disputes are arising due to concerns related to the use and acquisition of data, intellectual property rights, defamation, and other legal ramifications associated with AI development and deployment.

Earlier in June, Japan issued a warning and threatened to take action against OpenAI if it violates any privacy regulation. The Personal Information Protection Commission (PPC) asked the ChatGPT maker to only collect sensitive information with the user agreement.

Also, Getty Images, a prominent stock photo agency, sued Stability AI, a smaller AI startup, in February, claiming that the latter had illegally used Getty Images’ photographs to train its image-generating AI system. This case highlights the legal concerns surrounding data acquisition and usage, particularly when it involves copyrighted materials.

Furthermore, OpenAI faced another lawsuit in which a radio host from Georgia alleged defamation by ChatGPT. The radio host claimed that the AI-generated text wrongfully accused him of fraud, highlighting the potential risks associated with AI-generated content and the legal cost or consequences of such information.