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OpenAI Faces Potential Law Breach Amid Its Partnership Discussion with Worldcoin

2 mins
Updated by Harsh Notariya
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In Brief

  • Popular AI chatbot ChatGPT encounters legal hurdles due to its inability to ensure data accuracy.
  • European privacy group raises concerns about the potential spread of misinformation.
  • This issue highlights the tension between AI advancement and ethical use of sensitive data.
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OpenAI, the company that created the popular language model ChatGPT, faces challenges in legal compliance and data accuracy. This issue has prompted NOYB – the European Center for Digital Rights, a non-profit organization based in Vienna, Austria, to file a complaint against OpenAI with the Austrian Data Protection Authority (DPA).

Indeed, OpenAI’s data collection has caused concern among regulatory bodies and privacy advocates. This move from NOYB could potentially spark a larger conversation around the ethical use of data in the technology.

OpenAI’s Data Woes Expose Ethical Challenges of AI

The heart of the complaint lies in OpenAI’s recent admissions regarding ChatGPT’s limitations in data handling. According to OpenAI, the AI model is unable to verify the accuracy of the information it generates about individuals. Additionally, it also cannot disclose the origins of its data inputs.

Amidst the rising AI hype triggered by the launch of ChatGPT in November 2022, the tool’s broad adoption has exposed critical vulnerabilities. ChatGPT operates by predicting likely responses to user prompts without an inherent mechanism to ensure factual accuracy.

This has led to instances where the AI ‘hallucinates’ data, fabricating responses that can be misleading or entirely false. While such inaccuracies may be inconsequential in some contexts, they pose significant risks when involving personal data.

Read more: How To Build Your Personal AI Chatbot Using the ChatGPT API

The European Union’s General Data Protection Regulation (GDPR) mandates the accuracy of personal data and grants individuals the right to access and rectify incorrect information about themselves. OpenAI’s current capabilities fall short of these legal requirements, sparking a debate about the ethical implications of AI in handling sensitive data.

Maartje de Graaf, data protection lawyer at noyb, emphasizes the gravity of the situation.

“It’s clear that companies are currently unable to make chatbots like ChatGPT comply with EU law, when processing data about individuals. If a system cannot produce accurate and transparent results, it cannot be used to generate data about individuals. The technology has to follow the legal requirements, not the other way around,” de Graaf explains.

The issues extend beyond technical hurdles to broader regulatory challenges. Since its inception, generative AI tools, including ChatGPT, have been under intense scrutiny from European privacy watchdogs.

The Italian DPA, for instance, imposed restrictions on data processing by ChatGPT in early 2023, citing inaccuracies.

This was followed by a coordinated effort by the European Data Protection Board to assess and mitigate the risks associated with such AI platforms.

The timing of these legal challenges is particularly noteworthy. At the same time, OpenAI was in discussions to form a strategic alliance with Worldcoin, a project co-founded by Sam Altman, who also leads OpenAI.

Read more: 11 Best ChatGPT Chrome Extensions To Check Out in 2024

However, OpenAI’s potential collaboration with Worldcoin might introduce additional layers of legal and ethical dilemmas. Worldcoin’s approach to the use of biometric data intersects with OpenAI’s challenges in ensuring data privacy and accuracy.

Moreover, Worldcoin has faced scrutiny from legal authorities around the globe, including Kenya, Spain, and Argentina, regarding its data collection. Hence, this synergy could either pave the way for innovative technology uses or set a precedent for heightened regulatory interventions.

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Lynn Wang
Lynn Wang is a seasoned journalist at BeInCrypto, covering a wide range of topics, including tokenized real-world assets (RWA), tokenization, artificial intelligence (AI), regulatory enforcement, and investments in the crypto industry. Previously, she led a team of content creators and journalists for BeInCrypto Indonesia, focusing on the adoption of cryptocurrencies and blockchain technology in the region, as well as regulatory developments. Prior to that, at Value Magazine, she covered...
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