OpenAI

In a personal-injury suit against Avianca, attorney Steven Schwartz used ChatGPT for research and submitted a brief citing six judicial decisions that did not exist — ChatGPT invented them and even 'confirmed' they were real when asked. U.S. District Judge Castel sanctioned Schwartz and co-counsel Peter LoDuca $5,000 and required corrective letters. It became the landmark cautionary tale about AI hallucination in legal filings.

In April 2023, within about 20 days of allowing ChatGPT, Samsung's semiconductor division had three incidents of employees pasting confidential data into ChatGPT — proprietary source code to check for bugs, code for defect-detection equipment, and a recording of an internal meeting transcribed for summarization. Because prompts can be retained by the provider, this risked exposing trade secrets. Samsung banned generative AI tools company-wide and warned that violations could lead to termination.