False Claims and Legal Woes See OpenAI’s ChatGPT In Novel Defamation Claim

ChatGPT may soon achieve an unfortunate – but novel – distinction as the first generative AI product to face a lawsuit for defamation.

A mayor in Australia is considering legal action against OpenAI and ChatGPT after the chatbot shared false allegations about him, marking the first time a defamation suit has been brought against generative AI.

This is just the latest in a series of legal challenges for OpenAI, as an Italian privacy watchdog recently banned ChatGPT due to concerns about user data handling and inaccuracies.

The mayor in question is Brian Hood, who took office in Hepburn Shire, Australia, last November. He has expressed concerns that ChatGPT falsely named him as a guilty party in a bribery scandal involving Note Printing Australia, a subsidiary of the Reserve Bank of Australia.

Hood’s lawyers, Gordon Legal, have stated that he actually notified authorities about bribes paid to foreign officials to win printing contracts. They have sent a letter to OpenAI expressing concern about ChatGPT’s false claims and giving the company 28 days to fix the errors or face a defamation suit.

“It would potentially be a landmark moment in the sense that it’s applying this defamation law to a new area of artificial intelligence and publication in the IT space,” James Naughton, a partner at Gordon Legal, said.

Naughton has previously brought claims against Australia’s largest banks, stockbrokers and financial institutions among others.

It remains to be seen whether OpenAI can correct the issues quickly enough to avoid a lawsuit, or whether other public figures will follow Hood’s lead if they believe ChatGPT is spreading false information about them.

If Hood does proceed with legal action, it could set a precedent for applying defamation law to artificial intelligence and publication in the IT space.

The potential damages payout for defamation in Australia can be as high as A$400,000 (nearly $270,000 USD), and the size of the payout will depend on how many people had access to ChatGPT’s false information about Hood. Hood’s lawyer believes that he is entitled to at least half of the top payout given the seriousness of the defamatory claims.