FTC Warns Silicon Valley Not To Oversell ChatGPT Hype

On Monday, the Federal Trade Commission fired a warning shot across the bow of Silicon Valley behemoths advancing quickly with new artificial intelligence technologies, cautioning businesses against misrepresenting to consumers the potential benefits of emerging tools like ChatGPT.

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The Federal Trade Commission stated in a blog post that "marketers should know that — for FTC enforcement purposes — misleading or unsubstantiated claims about a product's efficacy are our bread and butter."

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The comments may portend future conflicts between regulators and tech firms, who are waging an industry-wide AI arms race in an effort to cash in on the success of the OpenAI chatbot.

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FTC attorney Michael Atleson stated in the blog post that the "AI craze is playing out today across many items, from toys to cars to chatbots and a lot of things in between" without specifically referencing ChatGPT, a bot that generates humanlike responses to users' inquiries.

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Certain items making AI claims, according to Atleson, "may not even function as promoted in the first place," and the "lack of efficacy may exist regardless of what additional harm the products can do."

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The remarks provide a roadmap for how regulators may examine the tech industry's expanding use of AI across products, and they indicate that misleading claims will probably be a key area of emphasis.

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The agency outlined four potential abuses they intend to watch out for: making inflated claims about what a product may be able to do; making unsupported claims about how AI will make a product better and possibly more expensive; failing to anticipate and reduce risks posed by the tool; and making inflated claims about how much a company is actually using AI.

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The push is a part of a larger focus under the Biden administration on "equity" in technology use, and the FTC has previously warned businesses that it's on the lookout for discriminatory uses of AI, including whether "algorithms developed for benign purposes like healthcare resource allocation and advertising" can unintentionally lead to "racial bias."

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The FTC plans to more than double the number of technologists it has on staff as it launches a new office devoted in part to keeping up with Silicon Valley giants, as we first reported earlier this month. Atleson noted that the FTC can use its in-house technologists to "look under the hood and analyze other materials to see if what's inside matches up with your claims."

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Tech firms are increasingly increasing their investment in AI research, especially in so-called large language models like the one that drives ChatGPT. They evaluate and produce text using deep learning tools using enormous amounts of data.

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In January, Microsoft said that it is investing billions of dollars in its collaboration with OpenAI, the San Francisco-based startup that created ChatGPT. Later, the tech titan revealed intentions to "reimagine" its Bing search engine by delving even farther into AI.

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Many other large tech companies have since done the same.

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In the "coming weeks," Google, a longtime leader in the AI sector, will make its own AI chatbot, Bard, accessible to the general public.

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Mark Zuckerberg, CEO of Meta, declared on Friday that the parent business of Facebook, named LLaMa, has been trained and would be made available to researchers. 

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As my colleagues have observed, Chinese IT giants Tencent and Baidu are also attempting to capitalize on ChatGPT's success but have encountered difficulties related to state censorship.

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The FTC's comments demonstrate that US regulators are actively debating how to rein in AI investments, even if they are still expanding in Silicon Valley.

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