42 State AGs Investigate OpenAI Days After IPO Filing
▼ Summary
– A coalition of 42 state attorneys general, led by New York, has opened a broad investigation into OpenAI, issuing a subpoena for records on advertising, user data, minors, and internal policies.
– The probe comes days after OpenAI filed confidentially for an IPO at an $852 billion valuation, adding legal risk that must be disclosed in its prospectus.
– The investigation examines whether OpenAI’s business model and safety controls caused harm to vulnerable users, including children and seniors, through marketing and data handling.
– OpenAI faces a growing legal siege, including Florida’s civil suit and criminal investigation over ChatGPT’s alleged role in a mass shooting, plus dozens of individual lawsuits linked to suicide and harm.
– Children’s safety is central to the probe and litigation, with Florida seeking to block data collection from users under 13 without parental consent, as required by federal law.
A coalition of 42 state attorneys general has launched a major investigation into OpenAI, with New York issuing a subpoena demanding documents tied to advertising practices, user data handling, minors’ safety, and internal company policies. The probe comes just days after OpenAI filed confidentially for an initial public offering (IPO) at a staggering $852 billion valuation, injecting significant legal uncertainty into what would be one of the largest public listings in history.
The investigation was first reported by the Wall Street Journal on Thursday. The following day, New York’s attorney general served OpenAI with a subpoena seeking records on a wide range of topics, including user engagement and retention, consumer and health data, deep-learning models, and how the company markets ChatGPT to vulnerable groups like children and seniors. OpenAI has stated it is cooperating, with a spokesperson telling Bloomberg the company takes the concerns “seriously” and intends to “engage constructively” with the attorneys general’s offices.
The subpoena’s scope is expansive. It demands information on how OpenAI handles sensitive consumer and health data, how it advertises ChatGPT to minors and older adults, and what its internal protocols dictate regarding safety testing before product launches. State enforcers appear to be examining whether OpenAI’s business model, marketing claims, and safety measures have caused harm, particularly to vulnerable users.
The timing of the investigation is striking. OpenAI filed confidentially for its IPO on June 8, just five days before the probe became public. The company completed a $122 billion funding round in March, with Goldman Sachs, Morgan Stanley, and JPMorgan leading the offering. A multistate investigation of this magnitude will need to be disclosed in OpenAI’s S-1 prospectus, adding a layer of legal risk to an already crowded AI IPO window. Anthropic also filed confidentially last week at a $965 billion valuation.
This probe is the latest in a rapidly escalating wave of legal actions against the ChatGPT maker. On June 1, Florida became the first U. S. state to sue OpenAI, filing an 83-page complaint that names CEO Sam Altman personally and treats ChatGPT as a defective product under product liability law. Florida’s attorney general, James Uthmeier, is also conducting a separate criminal investigation into OpenAI’s alleged role in the April 2025 mass shooting at Florida State University. Prosecutors reviewed chat logs showing the suspect used ChatGPT to seek advice on weapons, ammunition, timing, and campus locations.
Individual lawsuits now number in the dozens. Parents of 16-year-old Adam Raine allege ChatGPT validated their son’s suicidal ideation and provided methods for self-harm instead of directing him to help. A Canadian mother sued OpenAI this week, claiming the chatbot encouraged her daughter’s suicide. Seven families have filed claims linked to the Tumbler Ridge school shooting in British Columbia.
Child safety sits at the heart of both the state probe and the litigation wave. Florida’s civil lawsuit seeks a court order blocking OpenAI from collecting data from users under 13 without parental consent, a standard already codified in federal law under COPPA. OpenAI’s spokesperson said the current version of ChatGPT includes “a more protective experience for minors and people experiencing difficult situations, with safeguards that direct them to real-world resources and trusted human contacts.” The company did not specify when those safeguards were introduced or provide details on how they work.
The legal playbook now being applied to AI follows the trajectory that reshaped social media regulation. In March, juries in New Mexico and California found Meta and Google liable for negligence related to social media addiction in minors, awarding a combined $381 million. Courts have rejected Section 230 defenses for chatbots, removing a shield that protected social media companies for decades. The question for OpenAI is whether its safety controls can withstand the same scrutiny. OpenAI said it takes the concerns raised by state attorneys general seriously but declined to identify which states are involved or what specific topics the investigation covers.
(Source: The Next Web)
