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Microsoft and OpenAI were sued on Wednesday by sixteen pseudonymous individuals who claim the companies' AI products based on ChatGPT collected and divulged their personal information without adequate notice or consent. The complaint [PDF], filed in federal court in San Francisco, California, alleges the two businesses ignored the legal means of obtaining data for their AI models and chose to gather it without paying for it. "Despite established protocols for the purchase and use of personal information, Defendants took a different approach: theft," the complaint says. "They systematically scraped 300 billion words from the internet, 'books, articles, websites, and posts – including personal information obtained without consent.' OpenAI did so in secret, and without registering as a data broker as it was required to do under applicable law." Through their AI products, it claimed, the two companies "collect, store, track, share, and disclose" the personal information of millions of people, including product details, account information, names, contact details, login credentials, emails, payment information, transaction records, browser data, social media information, chat logs, usage data, analytics, cookies, searches, and other online activity. The complaint contends Microsoft and OpenAI have embedded into their AI products the personal information of millions of people, reflecting hobbies, religious beliefs, political views, voting records, social and support group membership, sexual orientations and gender identities, work histories, family photos, friends, and other data arising from online interactions. OpenAI developed a family of text-generating large language models, which includes GPT-2, GPT-4, and ChatGPT; Microsoft not only champions the technology but has been cramming it into all corners of its empire, from Windows to Azure. "With respect to personally identifiable information, defendants fail sufficiently to filter it out of the training models, putting millions at risk of having that information disclosed on prompt or otherwise to strangers around the world," the complaint says, citing The Register's March 18, 2021, special report on the subject. The 157-page complaint is heavy on media and academic citations expressing alarm about AI models and ethics but light on specific instances of harm. For the 16 plaintiffs, the complaint indicates that they used ChatGPT, as well as other internet services like Reddit, and expected that their digital interactions would not be incorporated into an AI model. Follow this and more on OUR FORUM.

Meta has been fined a record-breaking €1.2 billion ($1.3 billion) by European Union regulators for violating EU privacy laws by transferring the personal data of Facebook users to servers in the United States. The European Data Protection Board announced the fine in a statement Monday, saying it followed an inquiry into Facebook (FB) by the Irish Data Protection Commission, the chief regulator overseeing Meta’s operations in Europe. The move highlights ongoing uncertainty about how global businesses can legally transfer EU users’ data to overseas servers. The EU regulator said the processing and storage of personal data in the United States contravened Europe’s signature data privacy law, known as the General Data Protection Regulation. Chapter 5 of the GDPR sets out the conditions under which personal data can be transferred to third countries or international organizations. The fine is the largest ever levied under GDPR. The previous record of €746 million ($805.7 million) was levied against Amazon (AMZN) in 2021. Meta has also been ordered to cease the processing of personal data of European users in the United States within six months. Meta’s infringement is “very serious since it concerns systematic, repetitive and continuous transfers,” said Andrea Jelinek, chair of the European Data Protection Board. “Facebook has millions of users in Europe, so the volume of personal data transferred is massive. The unprecedented fine is a strong signal to organizations that serious infringements have far-reaching consequences,” she added. Meta, which also owns WhatsApp and Instagram, said it would appeal the ruling, including the fine. There would be no immediate disruption to Facebook in Europe, it added. The company said the root of the issue stemmed from a “conflict of law” between US rules on access to data and the privacy rights of Europeans. EU and US policymakers were on a “clear path” to resolving this conflict under a new transatlantic Data Privacy Framework. The new framework seeks to end the limbo facing companies since 2020, when Europe’s top court struck down a transatlantic legal framework designed to address EU concerns about potential US government surveillance of European citizens, known as Privacy Shield. The United States and the EU have been negotiating a successor agreement since last year. The continued lack of a Privacy Shield replacement threatens thousands of businesses that depend on being able to move EU user data to other jurisdictions, according to legal experts. The European Data Protection Board “chose to disregard the clear progress that policymakers are making to resolve this underlying issue,” Nick Clegg, Meta’s president of global affairs, and Jennifer Newstead, the company’s chief legal officer, said in a statement. “This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and the US,” they added. Before Monday’s ruling, Ireland’s Data Protection Commission had handed Meta nearly $1 billion in fines for alleged violations of GDPR since the fall of 2021. But in this instance it was not in favor of fining Meta, judging that doing so exceeded what could be regarded as “proportionate” to address the infringement. In its own statement Monday, the regulator said it was obliged to base its final ruling on the decision of the European Data Protection Board. Ireland has a narrow path to tread between retaining top US tech companies and aligning with the European Union’s hard-hitting approach to tech regulation. Dublin is home to the European headquarters of Apple, Meta, Twitter, and Google, which have created thousands of jobs in the country and boosted its economic growth. Ireland’s low corporate tax rate of 12.5% has been a major factor in luring these firms. The country was among the last in the Organization for Economic Cooperation and Development to join a global agreement in 2021 to tax multinational firms at a minimum rate of 15%. Complete details can be found posted on OUR FORUM.

When computer scientists at Microsoft started to experiment with a new artificial intelligence system last year, they asked it to solve a puzzle that should have required an intuitive understanding of the physical world. "Here we have a book, nine eggs, a laptop, a bottle, and a nail," they asked. "Please tell me how to stack them onto each other in a stable manner." The researchers were startled by the ingenuity of the AI system's answer. Put the eggs on the book, it said. Arrange the eggs in three rows with space between them. Make sure you don't crack them. "Place the laptop on top of the eggs, with the screen facing down and the keyboard facing up," it wrote. "The laptop will fit snugly within the boundaries of the book and the eggs, and its flat and rigid surface will provide a stable platform for the next layer." The clever suggestion made the researchers wonder whether they were witnessing a new kind of intelligence. In March, they published a 155-page research paper arguing that the system was a step toward artificial general intelligence, or AGI, which is shorthand for a machine that can do anything the human brain can do. Microsoft, the first major tech company to release a paper making such a bold claim, stirred one of the tech world's testiest debates: Is the industry building something akin to human intelligence? Or are some of the industry's brightest minds letting their imaginations get the best of them? "I started off being very skeptical – and that evolved into a sense of frustration, annoyance, maybe even fear," said Peter Lee, who leads research at Microsoft. "You think: Where the heck is this coming from?" Microsoft's research paper, "Sparks of Artificial General Intelligence," goes to the heart of what technologists have been working toward – and fearing – for decades. If they build a machine that works like the human brain or even better, it could change the world. But it could also be dangerous. Making AGI claims can be a reputation killer for computer scientists. What one researcher believes is a sign of intelligence can easily be explained away by another, and the debate often sounds more appropriate to a philosophy club than a computer lab. But some believe the industry has in the past year or so inched toward something that can't be explained away: a new AI system that is coming up with humanlike answers and ideas that weren't programmed into it. Microsoft has reorganized parts of its research labs to include multiple groups dedicated to exploring the idea. One will be run by Sebastien Bubeck, who was the lead author on the Microsoft AGI paper. About five years ago, companies like Google, Microsoft, and Open AI began building large language models, or LLMs. Those systems often spend months analyzing vast amounts of digital text, including books, Wikipedia articles, and chat logs. By pinpointing patterns in that text, they learned to generate text of their own, including term papers, poetry and computer code. They can even carry on a conversation. The technology the Microsoft researchers were working with, Open AI's GPT-4, is considered the most powerful of those systems. Microsoft is a close partner of Open AI and has invested $13 billion in the San Francisco company. The researchers included Bubeck, a 38-year-old French expatriate and former Princeton University professor. One of the first things he and his colleagues did was ask GPT-4 to write a mathematical proof showing that there were infinite prime numbers and do it in a way that rhymed. The technology's poetic proof was so impressive – both mathematically and linguistically – that he found it hard to understand what he was chatting with. Please visit OUR FORUM for more.