AI Chatbots Know More About You Than You Think

Plus: A Paramount Pause as Judge Intercedes in Warner Bros. Merger

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Cheddar's Big Business This Week
July 30, 2026

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As the battle rages for control of artificial intelligence, it’s becoming increasingly apparent that AI models from ChatGPT to the bot on the plumbing supply store’s website know an awful lot about you. BBTW editor spoke with Ben Winters, director of AI and privacy at the Consumer Federation of America, to understand  what AI companies collect, why they want it and what consumers can do to protect themselves.

What are AI companies collecting when we use a chatbot?

Any of the big AI companies that you are engaging with are collecting a few different layers of information. There’s no real way to know everything they are collecting. You can triangulate this based on what we know and can tell, what is said out loud, what people have been doing for years, and the literal representations that are made in the privacy policy. But all of those things end with some answer that is something like “pretty much anything.”

In practice, that means they’re obviously taking your input data—everything you put into the chat box. They are connecting any insights from that input data and any of the personal information or attributes you can glean from what that input data is. Sometimes that will be literally how they try to get people to upload financial information or health information.

What’s their goal?

The simplest answer with all data collection across the internet in any context is getting more data to sell better-targeted ads, so they are able to sell those ads at a higher rate because they have higher certainty that you will be clicking on them.

A lot of times with an AI chatbot, you might just be explicitly saying what you are looking for or what you’re worried about. So the answer is always ads. But it is also other things, especially in the chatbot context and really any generative AI context. If they want to improve their model, and you can only really improve your model with human normal sentences, then you have this unlimited series of human-written sentences from the humans that are using your product.

Why is this potentially more intrusive than Facebook or old-fashioned Google?

The generative AI version is a little bit less clear to people because it feels and looks like you’re having either a Google-like conversation—a sort of search-engine-adjacent way of using the web—or you think you are talking to your personal assistant. At least on Facebook, not everyone knew that everything was big data targeting all the time, but at least you knew that it was public-facing. People know more about data harvesting and privacy practices than they used to, but it’s still a fundamental difference in consumer expectation versus company practices.

Can chatbot companies shape what we believe or what we buy?

Chatbots are products that are designed by companies. They’re not things that have opinions on their own. There are explicit, obvious ways to have certain types of information not be shown.

It’s not very different than the way Google search traditionally has ranked search results. But it’s more nefarious because it is this one response and it feels authoritative. But it’s not.

So many of these AI companies have deals up and down the marketplace. You would imagine a lot of clients would probably get things like product recommendations, and those product recommendations are always going to be from Home Depot because you have a deal with Home Depot. There is an immense risk and opportunity for chatbot providers to put their thumbs on the scale about a company, about whether an investment or a purchase is good or not.

Are companies effectively building digital twins of us?

Yes, in the same way that ad-tech firms for advertising targeting make these lookalike audiences. They would take attributes and say, “This is a white guy in his 30s that lives in the Washington D.C. area and he likes basketball,” and whatever else it is.

You are able to make these segments that you can then either sell for completely innocuous reasons, or it could be what an administration uses to target a certain demographic and try to target misinformation efforts. All of those  things are used for whatever people buy them for and whatever the companies sell them for. 

Why offer these costly tools free or for $20 a month?

A lot of what they’re doing is trying to get market capture and buy-in, so that people are reliant on these systems. To be able to say, “All these people are using it, we have all this data,” then they’re able to get contracts with the Department of Defense and the State Department and with consulting firms. That’s where they’re making their money. The free consumer product is an extra funnel that makes for better PR and gets them more sources for ongoing use of that data.

What should policymakers do?

There’s definitely a question about the value, but it’s also a question about whether it’s just about compensation or if it’s really about consent and actual understanding of what’s happening. The most simple things are passing consumer privacy laws that apply for things that include but are not limited to chatbots. There are data-minimization requirements, that they can only collect data for the purpose of what you are using the AI tool for. There are restrictions about the way data is collected and how it can be used for training without express consent.

What can consumers do right now?

I am always hesitant to assign personal responsibility for data collection at scale. I think it’s more of a policy issue than an individual responsibility issue. But, people can use more privacy-protective versions of the products. There are DuckDuckGo chatbots that are not using your data or keeping your data or using it for advertising. And think twice about what you put into a chatbot. Don’t put anything into a chatbot that you really wouldn’t want anyone to see about you. There are leaks.

Are you optimistic consumers will regain some control?

It depends on the day you catch me. I am fairly optimistic because of how relatively quickly people have changed their minds from, “This is cool AI stuff,” to, “This is this extractive technology that’s making my Instagram feeds worse, and all these scams and all this stuff.” I think there will be some version of a regulatory framework, but it will be hard. I’m not optimistic that it is utopia—no extractive data companies or bad outcomes. I’m optimistic that something will get better.

This transcript was edited and condensed for space and clarity.

—Peter S. Green

Big Businesses mentioned this week

This week, big business!

The Usual Suspects

  • Paramount’s Waiting Game: The wait is on. David and Larry Ellison’s Paramount Skydance $PSKY ( ▼ 1.57% ) has agreed to an expensive time-out on its acquisition of Warner Bros. Discovery $WBD ( ▼ 0.27% ) , and urged a California court to move swiftly to a trial on accusations by 12 state attorneys general that the deal will destroy competition in film, TV and streaming. For every quarter Paramount can’t close the heavily leveraged $110 billion deal, originally planned for the end of September, Paramount owes WBD shareholders 25 cents a share or about $650 million. Paramount says the AGs have no idea what they’re talking about and are stuck in an outmoded understanding of how today’s media market functions. But California AG Rob Bonta, who’s leading the suit said combining the two media companies is bad for consumers: “When too few corporations have too much power in markets central to American life, it makes things more expensive.” A trial could start as early as November. Shares in Paramount are down 3% this week, and about 60% since a peak last September, shortly after the Ellisons paid $8 billion for the studio.   

  • Boeing’s bind: Forget that Qatari 747 President Donald Trump left in England on his way back from a  NATO summit earlier this month. The real Air Force One dilemma is the new series of AF1 planes that Boeing $BA ( ▲ 3.3% ) has been building for the White House for nearly a decade. They’re more than $2 billion over budget, and this week Boeing said it’s losing another $280 million on the $4 billion-plus project, with no assurances the planes will be delivered in time for America’s 48th president. That’s weighing down the firm’s results and slowing its turnaround under relatively new CEO Kelly Ortberg, who hits the two-year mark with the company next month. After a pair of crashes and a door blowout on its workhorse 737 Max planes, Boeing has been working to rebuild the confidence of regulators and clients. Now it’s adding a production line in Washington that will boost 737 production to 47 a year from 42, letting it chip away at a decade-long order backlog. But that’s left little money for designing a new plane to replace the 1960’s designed 700 series. Meanwhile Boeing faces competition from new planemaker, California-based JetZero, which is designing a wide-bodied 250-seat plane that looks like a manta ray, and just won $3 billion in loans and guarantees from the U.S. government’s Export-Import Bank. Keep your seatbelts fastened. 

  • Ditching Grandpa  has a price: Julie Masino, the parricidal CEO who took Grandpa and his rocking chair off Cracker Barrel’s $CBRL ( ▲ 0.94% ) logo last August, prompting conservative media to squawk about a “woke” makeover of the southern-style restaurant chain, has been shoved off the porch. She’ll be replaced as CEO by David Deno, former chief of Bloomin’ Brands $BLMN ( ▲ 0.57% ) , which owns Outback Steakhouse. Masino will get $4.6 million in severance. Deno gets $1 million a year in salary, plus stock and performance bonuses. Cracker Barrel shares are down 60% in the past five years, but they’ve more than doubled since March.

  • The Bux is Back: Starbucks $SBUX ( ▲ 1.62% ) CEO Brian Niccol’s revival plan appears to be working, as America’s biggest coffee chain saw its profit rise more than 90% in the fiscal third quarter to $1.05 billion from $558.3 million a year ago, with customers spending more at their local coffee bar, up 7.9% at stores open more than a year. Improving service, simplifying menus and workflows and redecorating its drab shops seem to be working. Shares were up about 4.5% in aftermarket trading Wednesday. 

(Google)

  • Carvana profits rise, stock falls: Sometimes you don’t want a lot of cheerleaders. Online used-car giant Carvana $CVNA ( ▼ 7.6% ) did record-shattering business in  the second quarter, selling 197,000 vehicles, a 40% increase over last year, and revenue up 52% and profit up 59%, for 10 consecutive quarters of growth. But after-market trading saw shares drop as much as 15%. That’s because Carvana projected total earnings below what some cheerleading analysts had predicted:$2.7 to $3 billion for the year, while some forecasts predicted $3 billion. 

  • Fed’s Cred on the line: When Donald Trump appointed Kevin Warsh as Fed chair, he wanted one thing: Lower interest rates going into the 2026 midterm elections. That would keep consumers (ergo, voters) happy, jumpstart the housing market and cut the cost of servicing the debt caused by his signature tax cuts. But it hasn’t worked out so well for Warsh. He’s been unable to cut rates, as employment has remained stagnant and inflation is stubbornly far from its 2% target (3.5% in June, though down from 4.2% in May). It’s not entirely his fault, either. The War with Iran has hiked oil prices more than 70%, food prices keep rising, and then there are tariffs and their impacts on a host of prices. Warsh says he wants to issue less guidance and let the markets lead the Fed, but the markets are not happy. After Wednesday’s decision not to raise rates (three of the 12 committee members did vote for a hike), investors appear to be losing confidence in the Fed’s ability to keep inflation at bay, raising the interest rate they’re demanding on 30-year Treasury bills by 11 basis points, to 5.22%, the highest level since 2007. In plain English, that means bond buyers fear inflation will eat away at the value of their bonds so they want more dollars at the end of the day. “Warsh didn’t convey the message clearly or explicitly, and the bond market puked on him,” Fed watcher Jon Hilsenrath wrote in a note to clients cited by multiple media sources. Warsh says he has a plan to cut inflation, but he’s not sharing it for now. Instead, he wants to use a different measure for inflation. But consumers aren’t in the mood to wait. “Interest rates are an increasingly heavy burden on the economy,” Mark Zandi, chief economist at Moody’s Analytics wrote, noting that since the Iran War started, the rate on a standard 30-year mortgage has jumped to 6.8% from under 6%. That’s largely why new home sales fell to 628,000 in June, down 5.6% from last year. And consumers are increasingly worried about food prices, which have zoomed up since the pandemic and accelerated since. Even Warsh’s preferred inflation measure, the personal consumption expenditures price index, is no help. It was up even more: rising 4.1% in June. 

  • Tariff Redux: Those tariffs that are whipsawing the economy are getting rougher. A bill now in Congress would let president Trump decide if he wants to impose tariffs up to 500% on imports from Russia and 100 percent on U.S. imports from countries that import lots of Russian oil and gas or help Russia evade sanctions. That’s a recipe for turmoil, says the U.S. Chamber of Commerce, which signed on to a letter urging Senate leaders to block the bill. “Tariffs of this scale would increase costs for everyday consumer goods, manufacturing inputs and other products while creating significant uncertainty for companies,” the letter said. The recent reductions in tariffs on Chinese-made goods, now down mostly to about 12.5%, means many Chinese firms are reshoring home after opening plants in other Asian countries, the New York Times reports. Meanwhile, The Trump Administration has added more tariffs to goods from Europe, Canada and Mexico, using a different rule than the one that was struck down by the Supreme Court earlier this year.

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Elon’s World

  • Still #1 but waaaay down. Remember when Elon Musk was worth more than a trillion dollars? Yep, I’m sure Elon does, too. But that was then, and now is now, and rockets don’t always all go up before they come down. That’s a long way of saying ”SpaceX? Sucker.” At Wednesday's close of $111, anyone who bought SpaceX $SPCX ( ▼ 0.6% ) shares at or after the IPO with its $135 price and the $160 a share start of trading, is a loser. Well, anyone that is who didn’t buy into SpaceX before it went public. Now according to Bloomberg’s billionaires list, Musk is only worth $700 billion. And that could fall. For the early investors to cash out, they’ll mostly need to sell their shares on the open market, and that may depress the SpaceX share price even further. And Tesla $TSLA ( ▲ 3.85% ) shares are down 18% in the past 10 days, and more than 40% since a late December peak. Markets are watching the Aug. 4 release of Tesla's second-quarter earnings, and August 6, when as much as 20% of SpaceX’s shares will be unlocked. That’s all made SpaceX one of Wall Street’s biggest short targets, with investors betting more than $26 billion ahead of its first earnings report and IPO lockup expiry. 

Tech Troubles

  • It’s all about the Cloud. This time it’s about the cloud of uncertainty hanging over the future of the Great AI Buildout. In a sentence: Who’s gonna make money? Will this be a repeat of the browser wars or the telecom cable battle of the 90’s? Right now it’s unclear. Two of the biggest players in the AI world, Facebook parent Meta $META ( ▼ 8.48% ) and Microsoft $MSFT ( ▲ 15.47% ) reported earnings this week, and investors want to see some return on the hundreds of billions being invested in AI. Meta shares tanked nearly 11% as investors waited to hear how CEO Mark Zuckerberg planned to make money off of AI. He didn’t have an answer. Meanwhile, over at Microsoft, where revenue climbed 18% to $90 billion in the second quarter, as its Azure cloud service boomed and paid AI subscribers also increased, investors rewarded the company’s plan to sink hundreds of billions more into AI, sending shares up 17% on Thursday. “The core of [Meta’s] business is doing great. But because of the scale of the investment cycle, the market wants monetization data points beyond just the core business and they didn’t really get them,” Mark Mahaney, managing director at Evercore ISI told the Wall Street Journal. Fears that without sign of profits the buildout could stop, have revived the Great Circularity, with chipmaker Nvidia $NVDA ( ▲ 2.63% ) reportedly in  talks to provide $250 billion in financing and guarantees to one of its biggest clients, OpenAI $OPEAZZX ( ▲ 0.88% ) , so that it can lease a 1-gigawatt data center in Ohio being developed by Softbank $SFTBY ( ▲ 8.96% ) .

The Sporting News

  • FIFA’s next big score? After raking in $15 billion in revenue from the 2026 World Cup (no clear word yet on profits), FIFA says it’s planning to grab another $4 billion in cash by placing its valuable broadcast rights, sponsorship, ticketing and licensing businesses into a new entity that would be worth $20 billion. Among prospective investors FIFA named are Joshua Kushner, the brother of Trump’s son-in-law, Jared. FIFA says the revenue would go to supporting its member organizations, and the move comes as FIFA President Gianni Infantini, the man who gave Donald Trump the only ever FIFA Peace Prize, is running for re-election next year. FIFA members have to approve the new venture, and the most powerful member, Europe’s soccer governing body UEFA, has given the plan a red card. “Fifa cannot continue to use our sport to enrich themselves and their friends,” the organization said in a statement, promising to boycott future World Cups if the deal goes ahead. Huge respect to Italy who took this stance a decade ago...Meanwhile, sport show powerhouse adidas $ADDYY ( ▼ 11.31% ) is hurting after spending nearly $250 million in marketing for the cup, only to find that every one of its competitors had also introduced an eye-catching pink or pink-cleated soccer shoe. (Turns out all the consumer surveys pointed in the same direction). Adidas missed profit expectations by about 8%, sending its shares down 16% on Thursday morning. 

  • While Spain was trouncing Argentina, eyes in France were tuned to the country’s annual bicycle race, the three-and-a-half-week long Tour de France. Once again, Slovenia's Tadej Pogačar won, for the fifth time in a row. Ratings for the Tour are high: some 45.6 million French watched at least some of the tour on TV this year, up from 33 million in 2018. But the Amaury family of Paris, which owns the Tour, has no plans to share the $170 million in annual TV revenue, not even to promote the sport and ensure its continued survival, as the New York Times reports in a fascinating dive into a strange corner of the sports business world. 

  • LIV is dead, long LIV the PGA: It looks like the hyper-expensive Saudi-funded PGA rival, LIV, has played its last rounds. LIV is cancelling the last championship of the season, which was set to be held at The Cardinal At St. John’s, near Detroit, where the combined purses totaled $40 million. The league paid lavishly for top golf talent, including Bryson DeChambeau and Jon Rahm, but in the four years since it teed off, it hasn’t grabbed the eyes of viewers, the purses of sponsors, or the handshakes of rival tours. The tournament is often played at courses owned by President Trump, and has a tournament set at his Bedminster club, so it’s a way for the Saudi Arabians to funnel money to the President. But the tournament was also a sand trap for Saudi Arabia’s Public Investment Fund, which poured more than $5 billion into the tournament before pulling the plug.

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.