Nippon Life Insurance’s U.S. Arm Sues OpenAI Over Legal Assistance Provided by ChatGPT

By Takeru Kise / Yomiuri Shimbun Correspondent

14:42 JST, March 7, 2026

NEW YORK — A U.S. subsidiary of major Japanese insurer Nippon Life Insurance Co. has sued OpenAI, the provider of artificial intelligence chatbot ChatGPT, over damages from legal assistance that the chatbot had provided to another party.

The insurance company filed the lawsuit in a federal district court in the Midwestern U.S. state of Illinois on Wednesday. According to Reuters, this is believed to be “one of the first cases to accuse a major AI developer of engaging in the unauthorized practice of law through a consumer-facing chatbot.”

Nippon Life is demanding that OpenAI stop ChatGPT’s legal services and pay $10.3 million (about ¥1.6 billion) in damages.

The complaint alleges that ChatGPT provided legal advice and other services without an attorney’s license to a former recipient of payments who had previously settled with the company. The company claims that the unlawful advice led the former recipient to believe the prior settlement was a forced agreement and to file a new lawsuit against the company, causing it to suffer damages including court costs.

The documents submitted to the court by the former recipient included fabricated case citations, and the company claims that these were effects from “hallucinations” in which the AI produced factually incorrect information.

In Illinois, practicing law requires an attorney’s license granted by the Illinois Supreme Court, and the AI is not admitted to practice law in the state. Nippon Life claims that the unauthorized practice of law constitutes contempt of court.

In October 2025, OpenAI prohibited the use of ChatGPT for providing tailored legal advice and drafting court documents.