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OpenAI: Mo’ Money, Mo’ Lawsuits

a dude looking up OpenAI’s legal battles

When it comes to change, there’s always going to be some level of resistance. Change implies moving into the unknown and exploring something new, and with that comes risk, which for the risk-averse can seem daunting. But change is also what fuels growth and innovation, which every entrepreneur appreciates. For startups, such change welcomes opportunities for success in what will always be a highly dynamic business environment. This is where companies like OpenAI find themselves in today’s world as they strive to advance generative AI. There’s no doubt generative AI has, is, and will change the world, but it also represents a major change that triggers worries and concerns. And it’s why OpenAI’s legal battles appear to be growing by leaps and bounds.

OpenAI’s legal battles on a screen before a gavel
OpenAI’s legal battles are increasing, and they stem mostly from copyright issues.

(It’s perilous to program AI with biases–read why in this Bold story.)

Despite being relatively new, OpenAI is having to invest heavily in its legal teams and representation. OpenAI’s legal battles are both numerous and high-profile, and that means significant dollars are needed. The company is also facing not one single issue but several legal battles. Certainly, there are debates about artificial intelligence and copyright law. But other legal matters are exploring things like consumer protections, antitrust competition, and fair business practices. One the one hand, OpenAI could take all this attention as a compliment. But on the other, OpenAI’s legal battles serve as a distraction to its larger goals of advancing AI. How this all plays out in the coming years will definitely be interesting.

“Congratulations, you’re in the big leagues. They are the market leaders in this completely revolutionary thing, which is very exciting but also means it’s going to be controversial for a really long time.” – Bradley Tusk, Uber’s first political adviser

An Attractive Legal Target

OpenAI emerged as a generative AI company in 2022. Since that time, it has received a tremendous amount of publicity and recognition. Its ChatGPT large language models has introduced AI to the world and in record time. But it also attracted the attention of several people who questioned the company’s methods. Since that time, numerous companies have filed lawsuits against OpenAI claiming AI and copyright law violations. This has been the most common allegation with parties opposing the way OpenAI has trained its AI models. Among some of the more notable ones include comedian Sarah Silverman and The New York Times. Others exist and are contributing to OpenAI’s legal battles.

Of course, OpenAI’s legal battles involve more than simply artificial intelligence and copyright laws. The company faces several other lawsuits and investigations for other reasons. For example, Elon Musk has an active suit against the company because of a change in the company’s charter. Musk wishes to hold OpenAI accountable for their original intentions of staying a non-profit company rather than a proprietary one. Likewise, numerous federal agencies are exploring OpenAI’s business practices in general. This includes its multibillion-dollar partnership with Microsoft and shareholder communications during prior company strife. Consumer data protection is also an issue being examined. This demonstrates why OpenAI is having to invest significant time and  money into legal representation.

some digital scales of justice in a hallway
It ain’t easy being the industry leader. Just ask Open AI.

In a League of Its Own

To some extent, it hasn’t been uncommon for new Big Tech companies to experience legal challenges. But OpenAI’s legal battles are both profound and quick within this scope. In recent years, other major tech companies have been required to defend themselves in the courtroom. Google has had to do so against antitrust claims, as is Apple currently in the Justice Department’s recent filings. Facebook also faced increased government scrutiny over fake news and falsehoods related to the 2016 election. But in all of these cases, they occurred more than a decade after the company’s founding. Though the same fear of new technology fueled these lawsuits as well, it took time before legal battles were launched. This isn’t the case for artificial intelligence and copyright law, consumer protections, and fair competition issues.

(Facebook has faced their own antitrust battles–read up on it in this Bold story.)

In examining OpenAI’s legal battles, they have happened faster and more furious. The company has a dozen major cases that it is being forced to address. The Securities and Exchange Commission want answers regarding OpenAI’s investor communications during weeks when CEO Sam Altman stepped down. The Federal Trade Commission is investigating potential data leaks and consumer privacy protection violations. And the Justice Department is questioning whether OpenAI’s partnership with Microsoft undermines fair competition. Though some of these issues are the same that other Big Tech companies faced, they’ve happened sooner. After all, OpenAI has only been in existence less than two years.

“There is sometimes a sentiment that because this technology is new, we’re totally unprepared and there are no ways to really keep it under control. There are quite a few regulators that already do have the authority to take action against AI-generated harms.” – Anna Makanju, OpenAI’s Global Affairs Chief Officer

Embracing the Challenge

artificial intelligence and copyright law on the scales of justice
Where artificial intelligence and copyright law intersect, you will find OpenAI battling it out.

It’s probably not surprising that OpenAI is taking an aggressive approach in addressing current challenges. In terms of OpenAI’s legal battles, the company has hired more than two dozen in-house attorneys. It’s also retained some of the top firms in the country. In addition, OpenAI has also launched a public relations campaign designed to influence the public and policymakers alike. Specifically, it is suggesting generative AI on a large scale offers protection against foreign foes like China. It also states large generative AI models are in the nation’s best interest economically and in relation to national security. These are similar strategies that other Big Tech companies have taken previously. Plus, it distracts attention to artificial intelligence and copyright law violations and other allegations.

Regardless of these strategies, OpenAI doesn’t suggest some generative AI regulations aren’t needed. In fact, it’s been suggested that major federal legislation and regulatory oversight could actually benefit larger AI companies. Compared to smaller startups in the AI field, companies like OpenAI could better comply with regulatory demands. This doesn’t mean OpenAI won’t still fight back against artificial intelligence and copyright law claims or roll over. But it’s evident based on the approach to OpenAI’s legal battles currently that the company expects ongoing legal hurdles. Perhaps, it’s just part of the business when it comes to Big Tech and high-dollar sectors. Change can be hard, and sometimes, it requires a fight to see positive change happen.


Generative AI and Higher Education Are the Perfect Match–Read How in this Bold Story!

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