The Fed has a lot to think about regarding further interest rate hikes at the four remaining FOMC meetings this year. The Federal Trade Commission (FTC) has apparently finished thinking.

According to a Thursday report in the Washington Post, the FTC has begun an investigation into ChatGPT maker OpenAI. In a 20-page demand letter, the agency wants to know whether or not OpenAI, by “incorporating, using, or relying on Large Language Models [LLMs] has (1) engaged in unfair or deceptive privacy or data security practices or (2) engaged in unfair or deceptive practices relating to risks of harm to consumers, including reputational harm.”

The question the FTC wants OpenAI to answer is whether current consumer protection laws apply to artificial intelligence. The agency warned the AI industry in April that there is “no AI exemption to the laws on the books.” Of special interest is the potential for AI to generate statements about individuals from information that people share when they interact with apps like ChatGPT.

How OpenAI develops and trains its LLMs, how the company assesses and addresses the risks to individual users from inaccurate or misleading information, and how the company mitigated the impact on individuals from a “Security Incident” disclosed in March 2020.

More recently, ChatGPT made up–and reported–false information about a radio talk show host, claiming he had been accused of embezzlement and fraud. The radio host, Mark Walters, has since filed a defamation suit against OpenAI.

TechCrunch’s Devin Coldewey has a nice summation of the FTC’s case:

[H]ardly a slam dunk: The technical aspects alone call into question whether this counts as publishing or speech or even anything but a private communication — these would all have to be proven.

But it’s also not a wild thing to ask a company to explain. It’s one thing to make a mistake, another to systematically and undetectably invent details about people, at huge scales, and not say anything about it. If Microsoft Word’s spell-checker occasionally added “convicted criminal” in front of people’s names, you’d better believe there would be an uproar.

OpenAI was given 14 days to schedule a phone conference with the FTC to discuss the agency’s demands for information and to suggest modifications to the demands.

A federal district court judged ruled Thursday that crypto token issuer Ripple Labs had not violated U.S. security laws by selling its XRP token on public exchanges. XRP’s value jumped by 75%, to around $0.82, shortly after the ruling was announced.

The ruling was not an unadulterated win for Ripple, however. The judge in the case, Analisa Torres, based her ruling on the fact that XRP was sold to individual investors who were likely to understand the token’s similarities to securities and, therefore, less likely to lose their shirts. That gives the Securities and Exchange Commission room to argue that retail investors are not as knowledgeable and, therefore, even if crypto coins and tokens are securities, they may not be sold to the general public (the rubes, so to speak).

Before U.S. markets opened Friday morning, three of the country’s largest banks and a few other huge companies reported quarterly earnings.

JPMorgan Chase & Co. (NYSE: JPM) beat consensus estimates on both the top and bottom lines. Earnings per share (EPS) came in 10% above estimates, and revenue rose 34% year over year. Shares traded up about 3% in Friday’s premarket.

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Wells Fargo & Co. (NYSE: WFC) also reported beating the Street’s EPS and revenue estimates. EPS was 8.7% better than estimates, and revenue rose by nearly 21% year over year. The stock traded up about 3.3%.

BlackRock  Inc. (NYSE: BLK) beat the consensus EPS estimate by nearly 9% but missed the revenue estimate by a hair. The stock traded down nearly 2% early Friday, thanks to net inflows falling short of analysts’ estimates.

UnitedHealth Group Inc. (NYSE: UNH) beat top- and bottom-line estimates, and shares traded about 3.3% higher in Friday’s premarket session. Rising medical costs were more than offset by increased premiums, even though costs rose by 16% and premiums by 13%.

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