By Geoffrey Smith 

-- Italy's privacy regulator banned the use of generative AI app ChatGPT, saying it violated Italian law on data privacy.

The move is the first major blow to the spread of an emerging and potentially transformative technology, which has become a viral sensation since its launch late last year. 

Garante per la Protezione dei Dati Personali, the Italian authority for data protection, said it will immediately block the app's operations from accessing the data of Italian users, saying it failed to notify users of a data breach that occurred on March 20th, which included the leak of payment details of subscribers to the service provided by its developer, Microsoft-backed (NASDAQ:) OpenAI.

GPDP drew attention to what it called "the lack of information to users and all interested parties whose data is collected by OpenAI," and above all "the absence of a legal basis justifying the mass collection and storage of personal data for the purpose of "training" the platform's underlying algorithms."

The ban is temporary. OpenAI has 20 days to respond to the concerns raised by GDPD.

The ban comes at the end of a week in which technology professionals and investors made their first concerted effort at flagging the risks latent in such powerful AI tools, which lie in its ability to convincingly reproduce human speech patterns and amend images. A joint letter published this week - whose signatories included Elon Musk - called for a temporary halt to updates of ChatGPT to allow time for reflection on the ethical implications of its development.

The news pushed down Microsoft stock by 0.3% in prermarket trading. Microsoft has a 10% stake in OpenAI and is using ChatGPT to enhance its Bing search engine.