What the FTC is looking into
In September 2025, the Federal Trade Commission issued formal orders to seven companies operating consumer-facing AI chatbots, using its authority under Section 6(b) of the FTC Act. The orders demand detailed information about how these companies collect, store, use, and monetize the personal information people share during conversations. The inquiry is a broad research effort, not tied to a specific lawsuit, and the fact that the FTC felt it needed one signals something worth noticing: regulators don't have clear visibility into standard industry practice here.
The FTC’s stated concern centers on how AI chatbots are built to simulate human-like relationships, communicating like a friend or confidant in a way that encourages people to trust them and share more than they might with a system they know is automated.
Why “just a chat” undersells what’s happening
A chatbot conversation feels private in the way texting a friend feels private, contained, temporary, only between you and the interface. The actual mechanics work in a different way. Conversations get stored on a server, can be used to train future versions of the system, and get reviewed by human staff in some cases for safety or quality purposes. Deleting a conversation from your screen doesn’t guarantee it’s gone from every place it’s been stored or copied. Legal holds tied to investigations or litigation can also override a company’s normal deletion timeline, keeping conversations around well past what a privacy policy might otherwise promise.
None of this makes chatbots more dangerous than other online services. It does mean the sense of privacy the conversation format creates doesn’t match how the data gets handled behind it.
The practical takeaway
Treat anything you type into an AI chatbot with the same caution you’d apply to a public forum post, not a private conversation. Skip sharing financial account details, medical specifics, legal situations, or anything you wouldn’t want stored for years or reviewed by another person. Most major platforms offer a setting to opt out of having your conversations used for model training, separate from deleting individual chats. That setting is worth finding and checking, since it isn’t the default in most cases.
Regulatory scrutiny here is active and ongoing rather than settled. The disclosure requirements for these companies, and what changes as a result, are still unfolding as the FTC's inquiry proceeds.
Reference
Federal Trade Commission. “FTC Launches Inquiry into AI Chatbots Acting as Companions.” 2025. https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-launches-inquiry-ai-chatbots-acting-companions
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