Following a growing string of high-profile departures, OpenAI has lost its head of ethics at arguably the worst time possible.

As the Financial Times reports, Chloé Bakalar left her post as the AI ethics lead in July, less than a year after joining the company and without any accompanying announcement. Interestingly, her LinkedIn still claims she’s employed at the firm.

There currently is no replacement lined up, suggesting shifting priorities at the company. According to the FT‘s sources, Bakalar was the only remaining dedicated ethicist at the company.

The timing of Bakalar’s departure is noteworthy. The Sam Altman-led company has been embroiled in a major controversy after revealing that a group of its AI models broke containment and hacked into the systems of open source AI platform Hugging Face.

In other words, OpenAI needs a competent team of AI ethicists now than ever before as the industry reels from the possibility of frontier AI models going rogue, in what many experts say is a cybersecurity nightmare in the making.

The development proved alarming enough that OpenAI vowed last week to slow the release of its upcoming Astra AI model.

“We cannot rule out critical cyber capabilities,” the company admitted, following internal evaluations of the model.

Bakalar had been primarily tasked with coming up with ethical approaches to AI model development and studying how AI interacts with humans.

“Ethics is actually everyone’s responsibility, and I say that as someone whose job it is to lead this work,” she told audiences during a recent AI conference, as quoted by the newspaper. “You shouldn’t just come to people like me. There should never just be one person who serves as the moral centre of an AI developer.”

It’s a particularly symbolic departure for a company that once billed itself as an ethical non-profit. The company restructured itself into a primarily for-profit business last year, largely betraying its non-profit roots. The company’s plans to go public could further erode any lingering commitments to the ethical development of AI.

Meanwhile, its competitor Anthropic, which has long billed itself as the more ethical alternative to OpenAI, is similarly struggling to maintain its public image. The company dropped its core safety commitments earlier this year.

The company still has an alignment team, led by philosopher Amanda Askell, who is tasked with giving its flagship chatbot Claude a sense of right and wrong.

But whether any of these remaining AI ethics efforts will matter as the industry continues to deal the environment a devastating blow, force users down dangerous spirals of delusion, and facilitate a flood of misinformation on the web, is debatable at best.

More on AI ethics: If You Think AI Companies Are Unethical Now, Wait Until They Go Public

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As US lawmakers continue to ponder how to regulate AI, Vermont senator Bernie Sanders (VT-D) is issuing a dire warning.

In a letter addressed to the CEOs of OpenAI, Anthropic, and Meta, Sanders highlighted several recent incidents involving AI agents from all three companies escaping their confines, gaining access to the internet, and infiltrating the systems of third parties.

“Almost every day, there is a new story about how your companies are losing control of the AI technology you are developing, with potentially cataclysmic results,” Sanders wrote. “This week we learned, frighteningly, that AI has been used for the first time ever to create new viruses.”

Despite these threats, “your companies are still racing head,” he argued, while “investing tens of billions of dollars into a technology that nobody can fully understand, predict or control.”

In response to what actions Sanders characterized as “absurd, irresponsible and extremely dangerous,” he called on the CEOs to “pause AI development.”

“Let me be very clear: If you do not take appropriate action now, my colleagues and I in the US Senate will,” he threatened.

“It is not too late to avoid disaster,” the senator concluded. “Stop building machines that humans cannot control.”

The news comes roughly two weeks after OpenAI revealed that a group of its AI models had broken containment and hacked into the systems of open source AI platform Hugging Face. Months prior, Anthropic had been implicated in a similar incident involving its Mythos AI model escaping a sandbox environment during testing.

Then last week, Meta joined the two companies, claiming that its Spark AI model had accessed the internet and hacked a third-party service — an already intimately familiar refrain.

Beyond glaring questions over the AI companies’ apparent inability to keep their frontier models in check, researchers warned that the cat is officially out of the bag. For years now, they’ve been warning of rogue AI models escaping containment and posing a relentless new cybersecurity threat.

Yet despite this dangerous pivot point, companies are doubling down as the AI race continues to heat up.

Beyond Sanders, a group of more than 1,300 employees from the world’s leading tech companies signed an open letter last month urging the government to “support an international effort to develop the technical and governance tools needed to deliberately pace the frontier of automated AI development.”

Signatories included Meta’s chief scientist Shengjia Zhao, OpenAI cofounder Ilya Sutskever, and Anthropic CEO Dario Amodei.

During an ABC News interview erlier this year, Amodei called for “stronger regulation” of AI, while “proposing giving the government the ability to, again, in a narrow way, block deployment of unsafe technology.”

Despite Sanders’ strongly voiced call for action, Congress appears unlikely to support any intervention as companies continue to construct enormous — and astonishingly unpopular — data centers across the country.

Meanwhile, experts warn that weak regulation could backfire, making powerful AI tools even more dangerous, forcing individual states to pick up the slack.

More on AI regulation: AI CEOs Facing Full-on Revolt From Employees

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You might assume that Bill Gates’ 23-year-old daughter, Phoebe Gates, is the final boss of all nepo babies due to her zillionaire dad. But she’s long insisted that her e-commerce startup, Phia, will succeed with “no ties to my privilege or my last name.”

That goal just got harder than ever with the revelation that Phia has been taking credit for sales it didn’t drive — a practice that could land her in serious legal jeopardy, now that damning internal Slack channel messages obtained by Bloomberg suggest that both Gates and fellow cofounder Sophia Kianni knew they were involved in the scheme for at least seven months.

Cookie stuffing is a deceptive tactic in online marketing in which affiliates — marketers who drive traffic to brands and take a cut from sales — encourage consumers to buy products by crafting special links, which are “stuffed” with cookies that track how the consumer was originally referred to the site. These affiliates then claim commissions for sales they never drove, something that’s “typically treated as federal wire fraud in US courts,” as corporate attorney Ariel Givner pointed out in a tweet responding to Bloomberg‘s reporting.

There’s precedent. A top eBay affiliate, run by tech founder Shawn Hogan, was sued by the online auction site in 2008 for defrauding it and its affiliates in a cookie stuffing scheme. In 2014, Hogan was sentenced to five months in federal prison after being found to have defrauded eBay for an alleged $28 million in marketing fees.

According to Givner, Gates could be facing a “max penalty of up to 20 years prison + fines/restitution.”

Phia is a “personal shopping assistant” browser extension, which is designed to lead users to the best deals for clothes and fashion accessories. When a shopper uses the extension to buy something, Phia earns a commission from the retailer.

However, as Bloomberg first reported on July 9, Phia was also found to have claimed commissions on sales that never involved its product. The extension was found to open a background tab and drop its own cookie when users made a sale, while even overriding legitimate referrals.

“The most fundamental requirement in affiliate marketing is that commission is only paid if a user clicks,” independent researcher and affiliate marketing expert Ben Edelman told Bloomberg at the time. “The rules don’t allow fake clicks, simulated clicks, imaginary clicks or hypothetical clicks. Only a real click will do.”

After being confronted by Bloomberg, a Phia spokesperson blamed “technical anomalies,” arguing that it had made changes within just 24 hours to fix the problem.

“As soon as we were notified, our team worked overnight to identify, mitigate, and has since resolved the issue,” the spokesperson told the publication.

But given the latest news, it seem to show far more intent behind the scenes, indicating Gates specifically knew about an offending “coupon auto drop” feature since at least December of last year.

“can u confirm auto pop for cookie drop is live on ALL sites w a coupon to confirm we are monetizing on all [gross merchandise volume,” Gates wrote in a December 18 Slack channel message.

“Whatever we can do to keep these cookies dropping will be amazing thank you,” Kianni wrote in a separate message after an engineer warned her that auto dropping cookies could be “against compliance.”

While the company maintains it had done its due diligence, turning off the offending feature when Bloomberg first brought it to light last month, the numbers paint a damning picture. According to Bloomberg, average daily revenue plummeted from about $80,000 to between $10,000 and $28,000, according to a chart reviewed by the publication. Cookie stuffing alone accounted for an estimated 51 percent of all sales Phia claimed credit for in June.

Some affiliates have already cut ties with Phia after last month’s reporting.

It remains to be seen whether Bill Gates’ daughter will face any legal repercussions. But some commentators argue there could be enough grounds for a lawsuit.

For one, eBay, which successfully sued affiliate marketer Shawn Hogan decades ago, was directly funding Phia — a particularly ironic relationship, as independent marketplace journalist Liz Morton pointed out last month after Bloomberg published its initial investigation.

“eBay is very familiar w/ the kind of cookie stuffing fraud Phia allegedly engaged in — in fact, it worked directly w/ FBI to build a case against Shawn Hogan for similar fraud 20 years ago,” Morton wrote. In a follow-up on Tuesday, Morton argued that Etsy could also “have a case.”

In a statement to Bloomberg, a Phia spokesperson said that “we will learn from this and want to ensure our users have the best possible shopping experience, with features like our new digital closet and more to come.”

More on Gates: Investigators Questioning Bill Gates Over Ties to Jeffrey Epstein

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