Technology
OpenAI faces investigation by 42 US states as AI regulation tightens
OpenAI is under investigation by a coalition of 42 U.S. state attorneys general seeking information on data practices, advertising activities and AI safeguards. The inquiry comes as governments across the United States, Europe and Australia expand oversight of artificial intelligence companies amid growing business adoption of AI technologies.
Key Highlights
- Coalition of 42 U.S. state attorneys general has launched an OpenAI investigation.
- Regulators are seeking records on data practices, advertising and AI safeguards.
- OpenAI says it is cooperating and engaging constructively with authorities.
- Company recently reported about US$10 billion in annual recurring revenue.
- AI oversight is expanding across the U.S., Europe, Australia and Asia-Pacific.
OpenAI is currently being broadly investigated by a consortium of 42 US state attorneys general, highlighting the intense scrutiny on one of the world's most influential AI companies amid growing government efforts to grapple with the rapid adoption of the technology.
The core of the investigation is centered around a subpoena demanding documents relating to OpenAI's business operations, data management, advertising methods, customer interaction, and safeguards implemented into their AI systems. This inquiry is being orchestrated through the office of the Attorney General of New York and comprises of attorneys general from all corners of the United States.
OpenAI has confirmed that it is collaborating with the authorities and is engaged in a constructive dialogue with regulators. At this time, the company has not been accused of any wrongdoing, and the investigation is still underway.
Consumer Protection and AI Safeguards Under the Microscope
This investigation comes at a time when the implications of AI systems interacting with consumers, and the methods used to manage risks, are being closely scrutinized by policy makers.
According to reports, regulators are trying to get a clear picture regarding the handling of consumer and health related data, child and elder user protection measures, and policies in place to deal with the potential for harmful AI-generated material. They are also seeking internal policies regarding the development and rollout of OpenAI products.
This latest investigation adds to a growing number of reviews of major tech companies by regulators trying to establish a framework to supervise artificial intelligence.
AI Regulation Gaining Ground Globally
This latest investigation into OpenAI follows closely on the heels of other countries making significant strides in establishing regulatory frameworks around AI.
The EU has already begun enforcing its own AI Act, while countries like Australia, the UK, Canada, Japan, and Singapore are setting up policy guidelines or framework frameworks around AI use. For businesses operating on a global scale, being compliant with these various rules and guidelines is becoming increasingly crucial.
The United States represents one of the biggest markets for AI adoption in the world, and enterprises from industries like healthcare, finance, retail, and professional services are aggressively deploying AI models of generative type.
OpenAI Continues its Strong Growth Despite Regulatory Scrutiny
The regulatory review by attorneys general is taking place in the midst of significant commercial expansion at OpenAI. The company reported that it is currently earning roughly US$10 billion annually in recurring revenue, almost double from approximately US$5.5 billion a year ago, largely thanks to its various services targeting businesses, API offerings, and subscriptions.
Industry growth has been equally rapid: According to research from Grand View Research, the global market for generative AI reached over US$22 billion in 2025 as businesses and governments continue to embrace the technology.
Although the outcome of this investigation is still unknown, this case is bound to be keenly observed by companies, investors, and regulators worldwide as the landscape of AI governance evolves.
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