OpenAI Is Being Investigated by Multiple States — and Its IPO Could Be at Stake

TLDR

• A coalition of state attorneys general has subpoenaed OpenAI, seeking documents on data practices, user safety, and consumer protection
• New York Attorney General Letitia James’ office issued the subpoena covering advertising, data handling, minors, and AI behavior
• Florida became the first state to sue OpenAI, alleging it knowingly released an unsafe product
• A criminal investigation was opened in Florida over ChatGPT’s alleged link to a mass shooting at Florida State University
• The probe comes after OpenAI confidentially filed IPO paperwork with the SEC

A coalition of state attorneys general is investigating OpenAI and served the company with a subpoena on Friday, according to a Wall Street Journal report. The action comes as OpenAI prepares for a potential initial public offering.

The subpoena was issued by New York Attorney General Letitia James’ office. It requests documents covering a wide range of topics.

Those topics include advertising practices, user engagement strategies, consumer and health data handling, activities involving minors and seniors, deep-learning models, and internal company policies.

The probe also asks about AI sycophancy. This refers to chatbots that excessively agree with users rather than giving balanced responses.

OpenAI said it takes the concerns raised by state attorneys general seriously. The company said it intends to engage constructively with their offices.

Florida Takes Legal Action Against OpenAI

Earlier this month, Florida became the first state to sue OpenAI and CEO Sam Altman. The lawsuit claims the company knowingly released an unsafe product and ignored warnings that it could harm users.

Florida Attorney General James Uthmeier also opened a criminal investigation into OpenAI in April. The probe centers on ChatGPT’s alleged role in a mass shooting at Florida State University.

Authorities claim the suspect used the chatbot as a confidant while planning the attack.

Broader State Scrutiny of AI Companies

OpenAI is not the only AI company facing pressure from state regulators.

In December, a coalition of 42 attorneys general sent a letter to OpenAI, Meta Platforms, Anthropic, Google, and xAI. The letter urged stronger safeguards for vulnerable users and warned that developers could be held accountable for harmful chatbot outputs.

California Attorney General Rob Bonta announced a separate investigation earlier this year. It focuses on sexually explicit images allegedly generated using xAI’s Grok chatbot, including images of women and children.

The multi-state subpoena targeting OpenAI arrives at a sensitive time. The company recently filed confidential IPO paperwork with the Securities and Exchange Commission.

Legal and regulatory scrutiny at this stage could affect how investors view the company ahead of any public offering.

OpenAI did not respond to additional requests for comment beyond its initial statement.

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