In an eyebrow-raising display of regulatory bravado, the Federal Trade Commission (FTC) is now playing detective with OpenAI’s chatbot, ChatGPT. Apparently, the FTC suspects this AI tool of engaging in deceptive practices, generating erroneous information that could harm consumers. This is a bit rich, considering OpenAI has been up front about potential flaws, even including a warning label about the possibility of false or misleading info. But hey, who reads those, right?

OpenAI’s CEO, Sam Altman, tweeted a confident response:”it’s super important to us that out [sic] technology is safe and pro-consumer, and we are confident we follow the law.”

FTC’s Chair, Lina Khan, boldly declared that AI is not above consumer protection laws: “There is no AI exemption to the laws on the books.” Despite OpenAI’s built-in limitations and explicit disclaimers, the FTC is treating them like deceptive merchants now. Interesting times!

Critics argue the FTC’s actions could stifle innovation. Will Rinehart from Utah’s Center for Growth and Opportunity calls it a “shakedown.” On the surface, that’s exactly what this looks like.

While I appreciate that there are “big feelings” on both sides of this issue, a dash of common sense wouldn’t hurt when attempting to regulate AI. Maybe the FTC should start by reading the warning labels.

Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.

About Shelly Palmer

Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named LinkedIn’s “Top Voice in Technology,” he covers tech and business for Good Day New York, is a regular commentator on CNN and writes a popular daily business blog. He's a bestselling author, and the creator of the popular, free online course, Generative AI for Execs. Follow @shellypalmer or visit



PreviousGoogle Unveils AI-Powered NotebookLM: The Future of Note-Taking NextChina's New Blueprint: Regulating the Wild Wild East of AI

Get Briefed Every Day!

Subscribe to my daily newsletter featuring current events and the top stories in technology, media, and marketing.