OpenAI lawsuit alleges data scraping in training AI models

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OpenAI, maker of generative artificial intelligence (AI) platform, is at the center of another lawsuit over the alleged illegal use of private data in training its AI models.

The suit, filed in the United States District Court for the Northern District of California, names Microsoft (NASDAQ: MSFT) as a co-defendant. Plaintiffs allege that OpenAI and its investor, Microsoft, relied on illegal web scraping techniques to obtain data to train its successful AI models.

OpenAI failed to seek the consent of internet users and paid little regard to the victims’ ages, according to the filing.

“This class action lawsuit arises from Defendants’ unlawful and harmful conduct in developing, marketing, and operating their AI products, including ChatGPT-3.5, ChatGPT-4.0, Dall-E, and Vall-E (the ‘Products’), which use stolen private information, including personally identifiable information, from hundreds of millions of internet users, including children of all ages, without their informed consent or knowledge,” per the filed complaint.

The plaintiffs argue that OpenAI had netted millions of dollars in profits due to the indiscriminate web scraping activities. In their claims, the plaintiffs are urging the court to order the “non-restitutionary disgorgement” of profits against OpenAI for individuals affected by the “illegal” use of personal data.

“Without this unprecedented theft of private and copyrighted information belonging to real people, communicated to unique communities, for specific purposes, targeting specific audiences, the Products would not be the multi-billion-dollar business they are today,” read the filing.

Furthermore, the filing alleged that OpenAI’s restructuring in 2019 was a ploy to scrape large amounts of personal data from unsuspecting internet users. They argue that the AI developer made use of automated bots to harvest data, laying the foundations for the firm’s successes in recent years.

Following the surge in adoption of OpenAI products, Fortune stated that the company reportedly earns up to $80 million per month, enough to cancel its $540 million loss in 2022. OpenAI currently charges users $20 monthly for access to ChatGPT Plus, contributing to a chunk of the firm’s revenue.

Both OpenAI and Microsoft have previously been embroiled in lawsuits revolving around illegal data scraping, with X (formerly known as Twitter) putting in measures to prevent scraping.

Unfazed by the claims

OpenAI has continued to innovate despite regulatory and legal troubles surrounding the company. Barely weeks after the U.S. Federal Trade Commission (FTC) opened a full-scale investigation against the company, OpenAI unveiled plans to add new functionalities to ChatGPT.

In July, the company announced the launch of ChatGPT Enterprise to promote the seamless integration of generative AI in the workplace. The new iteration of the chatbot will place a premium on efficiency, safety, and privacy. Still, grave fears are that its advancements will lead to job losses.

Already, ChatGPT has shown proficiency in Web3 smart contract audits, casting doubt over the long-term prospects of auditors as generative AI continues its development at a searing pace.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

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