Snap shares drop as FTC refers MyAI chatbot complaint to the DOJ
Snap CEO Evan Spiegel, joins CNBC ‘Power Lunch’ on September 17, 2024.
CNBC
Snap shares closed down 5% on Thursday after the Federal Trade Commission said it would refer a complaint against the company to the Department of Justice.
The FTC’s non-public complaint involves allegations that Snapchat’s My AI chatbot poses “risks and harms to young users,” the commission said in a statement. The complaint stems from the FTC’s compliance reviews with Snap following a 2014 settlement regarding allegations of public deception pertaining to data collection by the company.
As part of the FTC’s compliance reviews of Snap, the agency said it had uncovered the possibility that the company “is violating or is about to violate the law.”
“A proceeding is in the public interest,” the FTC said in its statement.
The FTC did not specify what about the My AI chatbot its complaint was focused on, but the chatbot has previously drawn scrutiny.
A Snap spokesperson pushed back against the FTC’s claims in a statement to CNBC.
“Unfortunately, on the last day of this Administration, a divided FTC decided to vote out a proposed complaint that does not consider any of these efforts, is based on inaccuracies, and lacks concrete evidence,” the Snap spokesperson said. “It also fails to identify any tangible harm and is subject to serious First Amendment concerns.”
The spokesperson added that while the company shares the FTC’s “focus on ensuring the thoughtful development of generative AI,” Snap believes that the “complaint would stifle innovation and competition in a critical and growing sector of the economy.”
Jonathan Raa | AP
Snap debuted the My AI chatbot in 2023. It is powered by the large language models of OpenAI and Google, giving it the ability to answer user questions and provide tips and suggestions similar to ChatGPT and other AI-powered chatting tools.
The chatbot has been noted for providing problematic responses. In one instance while speaking with a reporter who was pretending to be a teenager, the chatbot answered explained how to hide the smell of alcohol and marijuana, The Washington Post reported in 2023. At the time of the chatbot’s initial release, Snap said that My AI, like other AI-powered chatbots, is “prone to hallucination and can be tricked into saying just about anything. Please be aware of its many deficiencies and sorry in advance!”
In Oct. 2023, the United Kingdom’s Information Commissioner’s Office issued a preliminary enforcement notice against Snap, alleging that the company’s My AI-related risk assessment “did not adequately assess the data protection risks posed by the generative AI technology, particularly to children.”
Although the FTC said that it voted during a closed meeting to issue a public statement about it’s case against Snap and its ensuing referral to the DOJ, it noted that FTC commissioners Melissa Holyoak and Andrew Ferguson were absent.
The FTC also pointed to a dissenting statement by Ferguson, who President-elect Donald Trump named in December to replace Lina Khan as the next FTC chair.
Ferguson noted that these kinds of referrals “are not disclosed unless and until the complaint is filed in court by the Department or the Commission.”
“I did not participate in the farcical closed meeting at which this matter was approved,” he wrote.
Ferguson added that he opposes the FTC’s complaint against Snap, but that he can’t “release a detailed analysis of its many problems,” because the case is not public. Ferguson wrote that the complaint’s interpretations of an FTC law is “wrong” and that it is “in direct conflict with the guarantees of the First Amendment.”
If the DOJ files the complaint, Ferguson said he will “release a more detailed statement about this affront to the Constitution and the rule of law.”
Watch: Snap CEO on earnings beat and new advertising products
OpenAI and Advanced Micro Devices have reached a deal that could see Sam Altman‘s company take a 10% stake in the chipmaker.
AMD stock skyrocketed more than 30% on Monday following the news.
OpenAI will deploy 6 gigawatts of AMD’s Instinct graphics processing units over multiple years and across multiple generations of hardware, the companies said Monday. It will kick off with an initial 1-gigawatt rollout of chips in the second half of 2026.
“We have to do this,” OpenAI President Greg Brockman told CNBC’s “Squawk on the Street.” “This is so core to our mission if we really want to be able to scale to reach all of humanity, this is what we have to do.”
Brockman added that the company is already unable to launch many features in ChatGPT and other products that could generate revenue because of the lack of compute power.
As part of the tie-up, AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, with vesting milestones tied to both deployment volume and AMD’s share price.
The first tranche vests with the first full gigawatt deployment, with additional tranches unlocking as OpenAI scales to 6 gigawatts and meets key technical and commercial milestones required for large-scale rollout.
If OpenAI exercises the full warrant, it could acquire approximately 10% ownership in AMD, based on the current number of shares outstanding.
The ChatGPT maker said the deal was worth billions, but declined to disclose a specific dollar amount.
AMD one-day stock chart.
The deal positions AMD as a core strategic partner to OpenAI, marking one of the largest GPU deployment agreements in the artificial intelligence industry to date.
AMD CEO Lisa Su told CNBC’s “Squawk on the Street” that AI is on a 10-year growth path, and “at the end of the day, you need the foundational compute to do that.”
“You need partnerships like this that really bring the ecosystem together to ensure that, you know, we can really get the best technologies, you know, out there,” she said. “So we’re super excited about the opportunities here.”
The partnership could help ease industrywide pressure on supply chains and reduce OpenAI’s reliance on a single vendor.
OpenAI unveiled a landmark $100 billion equity-and-supply agreement with Nvidia nearly two weeks ago, cementing the chip giant’s role in powering the next generation of OpenAI models. That arrangement combined capital investment with long-term hardware supply — though in Nvidia’s case, it was the chipmaker taking an ownership stake in OpenAI.
Shares of Nvidia fell 1% on Monday following news of the OpenAI-AMD deal.
That deal accounts for a dedicated 10-gigawatt portion of OpenAI’s broader 23-gigawatt infrastructure road map. At an estimated $50 billion in construction costs per gigawatt — together with the AMD deal — OpenAI has committed roughly $1 trillion in new buildout spending in just the past two weeks.
OpenAI is also in talks with Broadcom to build custom chips for its next generation of models.
The arrangement between OpenAI and AMD adds a new layer to the increasingly circular nature of AI’s corporate economy, where capital, equity and compute are traded among the same handful of companies building and powering the technology.
Nvidia is supplying the capital to buy its chips. Oracle is helping build the sites. AMD and Broadcom are stepping in as suppliers. OpenAI is anchoring the demand.
It’s a tightly wound circular economy, and one that analysts fear could face real strain if any link in the chain starts to weaken.
For AMD, the partnership is both a commercial milestone and a validation of its next-generation Instinct road map.
After years of trailing Nvidia in the AI accelerator market, AMD now has a flagship customer at the forefront of the generative AI boom.
Su said it creates “a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”
It also reinforces OpenAI’s broader infrastructure ambitions.
Through its Stargate project, CEO Altman’s startup is rapidly transforming into one of the most aggressive infrastructure builders in the AI sector. Its first site in Abilene, Texas, is already operational and running Nvidia chips, with construction continuing to expand capacity.
Upcoming builds in New Mexico, Ohio and the Midwest are expected to feature a mix of suppliers, including AMD.
WATCH: OpenAI’s Sarah Friar says ‘full ecosystem’ needs to come together to address compute crunch
Jason Kim, chief executive officer of Firefly Aerospace, center, during the company’s initial public offering at the Nasdaq MarketSite in New York, US, on Thursday, Aug. 7, 2025.
Michael Nagle | Bloomberg | Getty Images
Firefly Aerospace stock climbed 9% Monday, after the space company said it’s buying defense technology contractor SciTec for $855 million as it looks to strengthen its national security offering.
The deal, announced Sunday, is slated to close at the end of the year and includes $300 million cash and $555 million in Firefly shares.
“These capabilities significantly enhance our ability to deliver integrated, software-defined solutions for critical national security imperatives, particularly Golden Dome,” said CEO Jason Kim in a release.
The company plans to integrate SciTec’s software into its tools. Capabilities such as missile warning, tracking and defense and autonomous command control will also support Firefly’s launch and space services, the company said.
Last week, Firefly shares sank over 20% in one trading session after the company said a rocket exploded during a ground test at its Texas facility. That came shortly after the Federal Aviation Administration cleared Firefly in an investigation over another rocket failure.
Firefly shares debuted on the Nasdaq this summer to strong investor demand. The public listing marked the third significant space tech debut of 2025, and shares surged more than 30% on its first day of trading. The stock has since pulled back.
Firefly carries a growing list of key government and defense partners as it builds its position in the national security space. That includes a recent $177 million contract with NASA and a $50 million investment from Northrop Grumman.
Once the acquisition closes, Princeton, New Jersey-based SciTec will operate as a subsidiary run by current CEO Jim Lisowski.
WATCH: Firefly Aerospace CEO Jason Kim on IPO debut, pathway to profitability
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