The Federal Trade Commission has opened an investigation into OpenAI, the artificial intelligence startup that makes ChatGPT, into whether the chat service harmed consumers through its collection of data and its publication of false information about individuals.

In a 20-page letter sent to the San Francisco company this week, the agency said it is also investigating OpenAI’s security practices. The FTC asked the company dozens of questions in its letter, including how the startup trains its AI models and handles personal data.

The investigation was earlier reported by The Washington Post and confirmed by a person familiar with the investigation.

The FTC’s investigation presents the first major regulatory threat to OpenAI. Sam Altman, the startup’s co-founder, testified in Congress in May and said he called for AI legislation to control the fast-growing industry, which is under scrutiny for how the technology could potentially kill jobs and spread misinformation.

OpenAI did not immediately respond to a request for comment.

When OpenAI first released ChatGPT in November, it immediately captured the public imagination with its ability to answer questions, write poetry and riff on almost any topic thrown at it. But the technology can also mix fact with fiction and even make up information, a phenomenon scientists call “hallucination”.

ChatGPT is driven by what AI researchers call a neural network. This is the same technology that translates between French and English in services like Google Translate and identifies pedestrians as self-driving cars navigate city streets. A neural network learns skills by analyzing data. By pointing out patterns in thousands of cat photos, for example, it can learn to recognize a cat.

Researchers at labs like OpenAI have designed neural networks that analyze massive amounts of digital text, including Wikipedia articles, books, news, and Internet chat logs. These systems, known as large language models, have learned to generate text on their own but can repeat incorrect information or combine facts in ways that produce inaccurate information.

Chatbots like ChatGPT, which are also deployed by companies like Google and Microsoft, represent a major shift in the way computer software is built and used. They are poised to reinvent internet search engines like Google Search and Bing, talking digital assistants like Alexa and Siri, and email services like Gmail and Outlook.

This is a developing story. Check back for updates.

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