OpenAI Faces Libel Lawsuit After ChatGPT's False Accusation of Embezzlement

OpenAI Faces Libel Lawsuit After ChatGPT’s False Accusation of Embezzlement

OpenAI, the renowned AI research organization, finds itself in legal trouble as it faces a libel lawsuit. The lawsuit was filed by Mark Walters, a Georgia radio host, who claims that OpenAI’s language model, ChatGPT, falsely accused him of embezzlement in response to a journalist’s query. Walters contends that the AI system’s response damaged his reputation and seeks legal redress for the alleged libel. This report delves into the details of the case, exploring the implications and potential outcomes of this novel legal battle.


On May 4th, a journalist requested ChatGPT to provide a summary of the case “The Second Amendment Foundation v. Robert Ferguson.” In its response, the AI chatbot allegedly claimed that the case involved Mark Walters, host of Armed American Radio, accusing him of embezzling money from The Second Amendment Foundation (SAF). However, Walters asserts that he had no involvement in the lawsuit and that ChatGPT fabricated this false information, referring to it as an AI “hallucination.”

The Libel Lawsuit

Walters filed a groundbreaking libel lawsuit against OpenAI, accusing the company of negligently publishing false and defamatory material about him. The lawsuit, submitted to Gwinnett County Superior Court on June 5th, claims that every statement of fact regarding Walters in ChatGPT’s response is untrue. Walters’ lawyer argues that OpenAI’s dissemination of this false information to the journalist damaged Walters’ reputation.

Implications and Legal Analysis

Legal experts predict that Walters’ lawsuit against OpenAI could pave the way for a wave of complex legal battles centering around the accountability of AI systems for their output. While the merits of this particular case may be debatable, it raises important questions regarding the boundaries of libel law in relation to AI-generated content.

Eugene Volokh, a professor at the University of California Los Angeles Law School, suggests that the existing legal principles could support some of these lawsuits. This potential legal precedent warrants attention and highlights the need to address the responsibility of AI developers and providers for the content generated by their systems.

OpenAI’s Response and Responsibility

OpenAI acknowledges the issue of AI “hallucinations” and has publicly stated that it is actively working on improving its models to reduce such fabrications. In a recent blog post, OpenAI research scientist Karl Cobbe emphasized the importance of mitigating these logical mistakes in AI systems to ensure the development of responsible and aligned artificial general intelligence.

Critique of ChatGPT’s Accuracy

Walters’ attorney, John Monroe, criticizes the current level of accuracy exhibited by ChatGPT, describing it as irresponsible to deploy a system that fabricates information and potentially causes harm. This case underscores the importance of ensuring the reliability and accountability of AI systems when deployed for public use.

Potential Outcome

While the outcome of Walters’ lawsuit against OpenAI remains uncertain, his attorney argues that ChatGPT’s false and malicious accusations could harm Walters’ reputation, exposing him to public contempt and ridicule. The case raises critical issues surrounding AI-generated content, the responsibility of AI developers, and the potential consequences for individuals affected by false information disseminated by AI systems.


OpenAI finds itself entangled in a libel lawsuit as Mark Walters seeks legal recourse for the alleged false accusations of embezzlement made by ChatGPT. This legal battle sets the stage for potential future lawsuits that will test the boundaries of libel law in the context of AI-generated content. As the development and deployment of AI systems progress, ensuring the accuracy, accountability, and ethical use of AI technology becomes increasingly imperative.

As society becomes more reliant on AI technologies, striking a balance between innovation and accountability becomes paramount. This case serves as a reminder that responsible development, rigorous testing, and robust safeguards are essential to prevent the dissemination of false and damaging information by AI systems.