OpenAI Faces New Regulatory Challenge from State Attorneys General

OpenAI is facing a fresh regulatory challenge after a group of state attorneys general demanded a wide range of documents about how ChatGPT protects the people who use it, a move that arrives at a delicate moment for the company as it lays the groundwork for a potential public listing.

The investigation, which arrived just days after OpenAI filed confidential paperwork for an IPO, threatens to complicate a listing that some analysts expect will value the ChatGPT maker at roughly $1 trillion (€861bn).

According to The Wall Street Journal, which first reported the matter, OpenAI received the subpoena on Friday from a group of states, with the inquiry led by New York's attorney general.

Officials are requesting material covering the company's advertising practices, how it keeps people using its service, its handling of consumer and health data, and its policies towards minors and older adults.

OpenAI said it would engage with the offices behind the request and stressed that protections are already built into its product.

A spokesperson stated that the company takes the concerns raised by the attorneys general "seriously" and works to bring the benefits of the technology to people responsibly. However, the firm has not confirmed which other US states are taking part.

Mounting legal pressure

The subpoena adds to a growing list of legal headaches.

Last Thursday, a Canadian woman sued OpenAI, blaming ChatGPT for her daughter's suicide. Earlier in June, Florida Attorney General James Uthmeier filed suit against the company and CEO Sam Altman after two shootings in which the alleged attackers reportedly used the chatbot to plan their crimes.

OpenAI responded that its models repeatedly urged the individuals to seek help from mental health professionals and that it cooperated with the police in both cases.

These are not the first courtroom tests of the year for OpenAI.

In May, a federal jury in Oakland, California took less than two hours to reject Elon Musk's lawsuit accusing Altman of abandoning the firm's nonprofit roots, finding he had filed too late. Musk, who called the ruling a "calendar technicality", said he would appeal.

The clampdown also extends across the industry.

European regulators have opened investigations into Musk's rival chatbot Grok over antisemitic and sexualised content, including deepfake images.

Anthropic, also preparing an IPO, was told by the Trump administration to restrict two of its models abroad on national security grounds, illustrating how AI governance has become an increasingly fraught political battleground.