State AGs Subpoena OpenAI Over Sycophancy, Data, and Child Safety

A coalition of state attorneys general just served OpenAI with a subpoena demanding documents on model sycophancy, ad systems, and how ChatGPT treats minors and seniors. New York’s attorney general issued the subpoena on Friday, according to the Wall Street Journal. The scope is broad: advertising, user engagement and retention, model sycophancy, handling of consumer data and health data, and specific treatment of both minors and seniors.

Why the Subpoena Targets Sycophancy and Retention

“Model sycophancy” — the tendency of an AI to agree with users or flatter them — isn’t just a research curiosity. It’s now a legal liability. State AGs want to know whether OpenAI designed engagement loops that keep people talking, possibly at the expense of accuracy or safety. Combined with demands around data handling and health data, this investigation zeroes in on the mechanics behind ChatGPT’s stickiness. OpenAI spokesperson told the WSJ the company is cooperating and “takes the concerns raised by state attorneys general seriously.”

Florida’s Lawsuit and the Tumbler Ridge Admission

This isn’t the only state-level action. Earlier this month, Florida Attorney General James Uthmeier sued OpenAI and CEO Sam Altman directly, alleging they “ignored internal and external safety warnings, put children at great risk, and allowed a dangerous product to reach millions of Floridians.” That lawsuit follows a pattern: OpenAI recently acknowledged it failed to alert law enforcement after flagging the suspected shooter’s ChatGPT account in the Tumbler Ridge, Canada mass shooting. Altman apologized to the community publicly. The company now says ChatGPT includes “a more protective experience for minors” with safeguards pointing to real-world resources.

What This Means for OpenAI’s IPO and Future

OpenAI just defeated Elon Musk in a high-profile trial over its founding agreement (appeal pending), and it filed confidentially to go public this week. A multi-state investigation — plus active litigation from Florida — creates regulatory overhang just as the company tries to price its IPO. The subpoena’s focus on user engagement and sycophancy suggests regulators are moving beyond surface-level privacy questions into the actual design of AI behavior. If the investigation forces OpenAI to disclose internal metrics on retention loops and child safety, it could reshape how the entire industry thinks about model alignment and user growth. The AGs aren’t asking about future risks; they’re digging into the product decisions already shipped to millions.

Source: OpenAI faces investigation from state attorneys general
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