The Federal Trade Commission (FTC) has launched an inquiry into seven major tech firms that operate consumer-facing AI chatbots. These include OpenAI, Alphabet (GOOGL), Meta (META), Elon Musk’s xAI, Snap (SNAP), Character Technologies, and Instagram. The goal is to understand how these companies are measuring, testing, and mitigating potential harms to children and teens who interact with their chatbots.
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AI chatbots are not just for answering questions anymore. They now use generative AI to simulate human-like communication and are built to feel like a friend, which can be especially tricky for kids and teens who might not realize they are chatting with a machine.
The FTC worries that this could cause children and teens to trust them too much, which might lead to privacy violations or psychological harm.
FTC Demands Transparency from AI Firms
The concerned companies are expected to provide detailed information on how their chatbots are developed, deployed, and monitored, especially in relation to child safety and compliance with the Children’s Online Privacy Protection Act (COPPA).
The investigation also focuses on how these firms monetize user engagement, process user inputs, and use data collected from conversations with their chatbots.
This is one of the most detailed investigations into the emotional and privacy risks of generative AI so far. It could lead to new rules or stronger protections for kids online.
Which AI Stock Is the Better Buy?
Turning to Wall Street, analysts think that Microsoft (MSFT) stock has the most room to run. Its price target implies about 25% upside potential. On the other hand, analysts expect the least from Alphabet (GOOGL), as its average price target of $233.39 implies a downside risk of 2.72%.
