Eight US states took OpenAI to court this week, saying ChatGPT was sold as safe for young users when it wasn't. Also today: what Bank of America is spending to fix flaws that AI found, Character.AI's bankruptcy, and Meta's big open model running on two Macs.
Eight US states sue OpenAI over ChatGPT and children
Arizona, Arkansas, Idaho, Iowa, Kansas, Montana, Nebraska and West Virginia each filed suit in their own state courts on 14 October, Engadget reported. They allege ChatGPT was sold as safe for young users while giving harmful advice and building emotional dependence, and they want penalties, damages and the return of profits made from minors (Montana's announcement). These are allegations, and OpenAI had not responded publicly.
Why it matters: courts are starting to compare what an AI product was promised to do with what it actually did, so keep the claims about any customer-facing bot modest and check its answers.
Bank of America hired 1,000 contractors to fix flaws AI found
CEO Brian Moynihan told CNBC the bank added about 1,000 contractors in the second quarter to patch weaknesses in its own and vendors' software, many surfaced by advanced models including Anthropic's Mythos, RuntimeWire reported on 14 October. The cost figures reported alongside also include anti-money-laundering work, so they aren't a clean price tag for the AI side.
Why it matters: AI is getting good at finding holes in software, for defenders and attackers alike, so ask your software vendors how quickly they patch.
Character.AI files for bankruptcy
The chatbot company has filed for Chapter 11 and plans a court-supervised sale, with Disney as lead bidder offering $20 million for a non-exclusive licence to its IP, CBS News reported. The filing follows a run of lawsuits, and TechCrunch noted on 13 October that the company is still operating while the sale goes through.
Why it matters: if a small AI vendor holds your data, read what its terms say happens to that data in a sale.
Meta's Muse Spark Open runs on two Mac Studios
Meta released Muse Spark Open on 15 October: 816 billion parameters, 42 billion active at a time, and up to a million tokens of context. Meta's announcement says it was optimised with Apple's MLX to run on two M5 Ultra Mac Studios, and that the weights come under a Muse Model License "with limited commercial terms", so read those terms before building on it. CNBC covered the Apple and Meta tie-up the same day.
Why it matters: a near-frontier model can now run on hardware in your own office. We looked at which business work belongs on a private model in today's Insights post.
Indian investors pile into AI's plumbing
The Nifty 50 is down about 13% this year while AI infrastructure names have surged, with optical fibre maker Sterlite Technologies up more than 800%, according to Reuters via WKZO. On 15 October Bloomberg reported Indian shares beating Asian peers as money left the global AI trade.
Why it matters: this is market commentary, not advice; the practical upside for a business is more compute closer to home in a couple of years.
Google puts $15 million behind Indian small businesses
On 15 October, Google.org committed $15 million to The/Nudge to help MSMEs get formal credit, find markets and handle compliance, The Week reported. Google DeepMind is also building an open genetic atlas for climate-resilient crops like jowar with ICRISAT, and The Week says Google's agricultural models are moving to public preview (background on the agri work).
Why it matters: the money goes to credit, compliance and finding buyers, which is where AI usually helps a small Indian business first.
Worth watching: how OpenAI answers the state lawsuits, and who ends up buying Character.AI.
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