AI interference risks robbing America of economic growth

Despite a recent losing streak against tech companies that would make the Oakland Athletics look competitive, the FTC has a new tech bogeyman.

The agency subpoenaed OpenAI last week as part of an investigation into potential consumer protection laws. The goal: To determine whether OpenAI’s signature app, ChatGPT, has harmed consumers by engaging in unfair and deceptive privacy practices and publishing false information about users through its chatbot.

OpenAI is not alone in facing the FTC’s glare.

Under Chair Lina Khan, who defended her agency’s record against the tech industry during a congressional hearing last week, the FTC is targeting tech at every turn.

Thanks to Musk’s takeover of Twitter and TikTok’s potential for national security leaks, it’s become vogue to demonize Big Tech these days. But the FTC’s crusade has morphed far beyond mere law enforcement into an abuse of power designed to generate headlines and berate big tech wherever possible.

Whether it’s attempting to redesign consent decrees with Meta, block mergers by Microsoft, or launching overly broad privacy investigations into Twitter, the FTC’s actions undermine the institution’s credibility. They also call into question whether these moves are really in the public’s best interests — or motivated by a partisan scheme to scapegoat tech giants.

In the case of OpenAI, the FTC has two claims. One surrounding data scraping, another around publishing false information about people – though really the folks we’re talking about here are public figures since ChatGPT doesn’t have information on ordinary individuals.

Regarding the former, it is already legal to scrape publicly available information on the Internet, which is primarily what ChatGPT does. The platform — at least for the moment — appears uninterested in pirating data belonging to ordinary users, but rather in acquiring knowledge needed to become a better resource for them. 

The FTC’s concerns about the publishing of false information appear heavily influenced by President Biden — along with a handful in Congress — openly worried about AI’s ability to spread misinformation. But ChatGPT derives its intelligence from publicly available user-generated speech such as articles, e-books, and websites. And that’s a problem for the FTC; the agency regulates competition, but a speech regulator it is most certainly not.

Of course, invoking the specter of misinformation in order to sow anti-tech animosity is nothing new in Washington. Policymakers have been running this playbook against social media companies for years. Two years ago, the US surgeon general pressured Facebook, Twitter, and YouTube to change their algorithms to prevent COVID misinformation.

Just last month, members of Congress issued a letter imploring YouTube to change its election misinformation policy after the company announced it would roll back the more restrictive rules it deployed during the 2020 election. The FTC’s investigation into OpenAI smells very much like a pretext for lawmakers to target the entire field of generative AI.

To its credit, OpenAI isn’t hiding the ball when it comes to ChatGPT’s flaws. On its site, ChatGPT reminds users that it might “produce inaccurate information about people, places, or facts.”

For non-paying users who prompt the app for information about more recent events, the app makes clear that its knowledge cutoff is from 2021. Users who accept whatever ChatGPT spits out as fact are not only misusing the tool – they’re ignoring the app’s clearly stated limitations.

The FTC’s OpenAI probe is an example of zealous behavior that threatens technological progress and advancement. A lack of clarity around whether a company’s practices are lawful or subject to sudden regulatory reinterpretation chills innovation and stifle growth. The FTC’s aggressive litigation strategy has also led to companies abandoning mergers.

AI software giant Nvidia and processor design firm Arm, for instance, dropped a planned tie-up after the FTC sued to block the $40 billion deal in late 2021. Meanwhile, the agency’s burdensome regulatory proposals threaten harm to small businesses still struggling with inflation by increasing their online advertising costs.   

In the case of AI, the FTC’s approach also risks sacrificing the nation’s ability to solidify its status as an AI leader. China longs to dominate the world in AI and its recently mandated that the technology be used to advance socialist values at odds with our way of life. Imagine if AI could only cite data from government-approved sources. That’s the vision for AI that the Chinese government wants to impose on the world. The Biden administration should think long and hard about whether hamstringing the US in this space is a smart idea. 

The FTC’s aggressive posture against the tech industry is well-documented, but not well-thought-out. The agency’s anti-tech bias has been costly for taxpayers. Cracking down on companies like OpenAI threatens to rob America of significant economic growth, with AI forecast to double America’s productivity rate and boost global GDP by $7 trillion over the next decade.  Agencies should enforce laws, but the FTC’s anti-tech vendetta requires a reset. 

James Czerniawski is the senior policy analyst at Americans for Prosperity, focusing on tech and innovation. Follow him on Twitter @JamesCz19.