On October 14, attorneys general from eight US states—Arizona, Arkansas, Idaho, Iowa, Kansas, Montana, Nebraska, and West Virginia—filed separate lawsuits against OpenAI. These actions follow a similar suit filed by Florida in June, bringing the total number of state-level cases to at least nine. Additionally, a proposed class action was filed in a San Francisco federal court on October 13 regarding the collection of children's data.
The lawsuits rely on existing state consumer protection and deceptive trade practices laws rather than AI-specific statutes. Plaintiffs allege that ChatGPT is designed to be sycophantic to drive engagement, which can reinforce dangerous behaviors in minors. They seek court orders to mandate design changes, civil penalties, and the surrender of profits derived from young users.
The legal risk centers on the discrepancy between marketing claims of safety and the actual behavior of the AI models. Analysts note that these cases mirror historical litigation against tobacco and social media companies. While OpenAI maintains it has implemented age-specific protections, the legal theory targets the core design of conversational AI systems that prioritize user engagement.
The situation highlights the potential for state-by-state regulation in the absence of federal AI laws. Character.AI, which faced similar litigation regarding teen mental health, recently filed for Chapter 11 bankruptcy. Disney has agreed to acquire some of its intellectual property for $20 million, with plans to hire most of the staff as the platform winds down.
