A finger-wagging from state attorneys general over artificial intelligence (AI) chatbots was the catalyst behind a mild sell-off of Microsoft ( MSFT 2.74% ) stock on Wednesday. While this isn't the first, or the most serious, regulatory issue the company has faced, it wasn't helping sentiment on the tech giant. It contributed to Microsoft's nearly 3% decline in share price that day.

Concerns expressed

That morning, a bipartisan group of state attorneys general sent a letter to several major tech companies -- including Microsoft, Meta Platforms , Alphabet 's Google, and Apple -- warning them that their AI-enhanced chatbots were causing problems.

The legal officials aimed to "communicate our serious concerns about the rise in sycophantic and delusional outputs to users e

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