Can You Blame the Chatbots?
Defamation, piracy, Tesla’s CEO search, Worldcoin and a Ponzi.
“Everything is securities fraud” is a big theme around here, and I have mused in the past about how large language models might be securities fraud. One possibility is: You go to a chatbot, you type in “is XYZ a good company,” and the chatbot hallucinates an answer like “yes they just discovered a cure for cancer” or “no they are doing huge fraud.” You buy or sell the stock, relying on the chatbot’s answer, but it’s totally false and the stock moves in the wrong direction. You sue the chatbot’s maker for securities fraud.
There are various practical problems with that hypothetical lawsuit: Was it fraud in connection with the purchase and sale of a security? Was the chatbot’s maker profiting from the alleged fraud? Were you reasonable in relying on the chatbot’s output, despite a bunch of disclaimers attached to it?