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(Update, 8:30 pm: A spokesperson for Gordon Legal provided a statement to Ars confirming that responses to text prompts generated by ChatGPT 3.5 and 4 vary, with defamatory comments still currently being generated in ChatGPT 3.5. Among "several false statements" generated by ChatGPT were falsehoods stating that Brian Hood "was accused of bribing officials in Malaysia, Indonesia, and Vietnam between 1999 and 2005, that he was sentenced to 30 months in prison after pleading guilty to two counts of false accounting under the Corporations Act in 2012, and that he authorised payments to a Malaysian arms dealer acting as a middleman to secure a contract with the Malaysian Government." Because "all of these statements are false," Gordon Legal "filed a Concerns Notice to OpenAI" that detailed the inaccuracy and demanded a rectification. “As artificial intelligence becomes increasingly integrated into our society, the accuracy of the information provided by these services will come under close legal scrutiny," James Naughton, Hood's lawyer, said, noting that if a defamation claim is raised, it "will aim to remedy the harm caused" to Hood and "ensure the accuracy of this software in his case.”)

It was only a matter of time before ChatGPT—an artificial intelligence tool that generates responses based on user text prompts—was threatened with its first defamation lawsuit. That happened last month, Reuters reported today, when an Australian regional mayor, Brian Hood, sent a letter on March 21 to the tool’s developer, OpenAI, announcing his plan to sue the company for ChatGPT’s alleged role in spreading false claims that he had gone to prison for bribery.

To avoid the landmark lawsuit, Hood gave OpenAI 28 days to modify ChatGPT’s responses and stop the tool from spouting disinformation.

According to Hood’s legal team, ChatGPT could seriously damage the mayor’s reputation by falsely claiming that Hood had been convicted for taking part in a foreign bribery scandal in the early 2000s while working for a subsidiary of the Reserve Bank of Australia. Hood had worked for a subsidiary, Note Printing Australia, but rather than being found guilty of bribery, Hood was the one who notified authorities about the bribes. Reuters reported that Hood was never charged with any crimes, but ChatGPT seems to have confused the facts when generating some responses to text prompts inquiring about Hood's history.

OpenAI did not immediately respond to Ars’ request for comment.

Ars attempted to replicate the error using ChatGPT, though, and it seems possible that OpenAI has fixed the errors as Hood's legal team has directed. When Ars asked ChatGPT if Hood served prison time for bribery, ChatGPT responded that Hood “has not served any prison time” and clarified that “there is no information available online to suggest that he has been convicted of any criminal offense.” Ars then asked if Hood had ever been charged with bribery, and ChatGPT responded, “I do not have any information indicating that Brian Hood, the current mayor of Hepburn Shire in Victoria, Australia, has been charged with bribery.”

Ars could not immediately reach Hood’s legal team to find out which text prompts generated the alleged defamatory claims or to confirm if OpenAI had responded to confirm that the error had been fixed. The legal team was still waiting for that response at the time that Reuters' report published early this morning.

Hood’s lawyer, James Naughton, a partner at Gordon Legal, told Reuters that Hood’s reputation is “central to his role” as an elected official known for “shining a light on corporate misconduct.” If AI tools like ChatGPT threaten to damage that reputation, Naughton told Reuters, “it makes a difference to him." That's why the landmark defamation lawsuit could be his only course of action if the alleged ChatGPT-generated errors are not corrected, he said.

It's unclear to Hood how many people using ChatGPT were exposed to the disinformation. Naughton told Reuters that the defamatory statements were so serious that Hood could claim more than $130,000 in defamation damages under Australian law.

Whether companies like OpenAI could be held liable for defamation is still debatable. It’s possible that companies could add sufficient disclaimers to products to avoid such liability, and they could then pass the liability on to users, who could be found to be negligently or intentionally spreading false claims while knowing that ChatGPT cannot always be trusted.