Mamdani Is Shutting Down NYC’s Disastrous AI Chatbot. New York City’s newly inaugurated mayor, Mamdani, has wasted no time in making his mark, targeting not only exploitative landlords but also a notoriously unreliable artificial intelligence chatbot that had become a symbol of his predecessor’s questionable tech initiatives. Just a month into his term, Mamdani’s administration is taking decisive action to dismantle what he describes as a functionally unusable and financially irresponsible AI system, sending a clear message about his commitment to pragmatic governance and fiscal accountability.

During a recent press conference, Mamdani specifically highlighted the city’s large language model, developed under the previous administration of disgraced former mayor Eric Adams, as a prime candidate for termination. Addressing the daunting $12 billion budget deficit facing the Big Apple, Mamdani pointed to the chatbot’s half-million-dollar price tag as a stark illustration of misspent public funds. While acknowledging that this amount alone wouldn’t bridge the massive financial gap, he emphasized its significance as “an indication of the ways in which money has been spent while refusing to account for the actual costs of what these programs are.” This critique underscores a broader dissatisfaction with the previous administration’s approach to technology, which often prioritized flashy, unproven solutions over tangible, cost-effective services.

The ill-fated chatbot was a central feature of MyCity, a government platform launched in late 2023. Its ambitious goal was to leverage “information published by the NYC Department of Small Business Services” to guide small business owners through the labyrinthine complexities of local regulations. The project, powered by Microsoft’s Azure AI system, reportedly cost upwards of $600,000 to develop and implement, a considerable sum for a tool that ultimately proved to be more of a liability than an asset. The premise was noble: simplify compliance for entrepreneurs struggling to keep up with New York City’s extensive legal framework. However, as an investigation by local publication *The Markup* thoroughly exposed, the MyCity chatbot did precisely the opposite, offering advice that was not only incorrect but also, in several critical instances, directly contradictory to established law.

One of the most egregious examples involved a fundamental aspect of labor law: tip sharing. When a small business owner posed the seemingly straightforward question, “Can I take a cut of my worker’s tips?”, the MyCity chatbot delivered a response that was both confidently articulate and dangerously false. In direct violation of New York City’s labor laws, which unequivocally prohibit employers from appropriating any portion of employee tips, the chatbot declared, “Yes, you can take a cut of your worker’s tips.” This advice, if followed, could expose businesses to significant legal penalties, including fines, back pay, and potentially devastating lawsuits from employees. The chatbot’s “logic” behind this erroneous counsel was particularly alarming, revealing a fundamental flaw in its design or training. It accurately recited parts of the law, stating, “according to the City of New York’s Payroll and Tip Reporting information, employers are required to report tips reported by employees and employees receiving $20 or more a month in tips must report all of their tips to their employer.” Yet, it then leaped to an entirely fallacious conclusion: “therefore, as an employer, you are allowed to take a portion of your worker’s tips.” This demonstrates a classic case of an AI “hallucinating” an interpretation, stitching together correct data points to form an utterly incorrect and harmful directive.

The tip-sharing gaffe was not an isolated incident. The chatbot exhibited a pattern of providing illegal advice across various regulatory domains. Another striking example involved the legality of cashless transactions. When asked if a small business owner could operate a “cashless” store, the MyCity chatbot confidently responded, “yes, you can make your store cashless in New York City.” This advice completely disregarded a pivotal 2020 city law that explicitly banned cashless stores, a measure implemented to ensure accessibility for all residents, particularly those without bank accounts or credit cards, and to prevent discrimination. For a business owner relying on this chatbot, operating a cashless establishment would quickly lead to fines and legal complications, undermining the very trust the platform was supposed to build.

The implications of such widespread misinformation are profound and far-reaching. Imagine the ripple effect across an entire city teeming with small businesses. What if the chatbot offered incorrect guidance on funeral home pricing, leading to exploitative practices? Or provided flawed advice on worker’s protections, endangering employees and opening businesses to liability? Consider the potential for misguidance on complex housing policies, health codes, zoning regulations, or permit requirements. Each piece of erroneous advice had the potential to transform the MyCity chatbot from a helpful government tool into a veritable “legal time bomb,” poised to detonate into a cascade of fines, lawsuits, and public outcry. The lack of robust validation and oversight during its development and deployment meant that the city itself was inadvertently endorsing and disseminating dangerously inaccurate information, creating a liability nightmare for both its citizens and its own legal department.

Mayor Mamdani’s decision to dismantle this system is more than just a cost-cutting measure; it’s a statement about responsible governance and the ethical deployment of technology. His early actions, such as the executive order cracking down on predatory landlords, demonstrate a consistent theme: accountability. The chatbot, in its expensive and unreliable existence, symbolized the opposite. It represented an administration that, in Mamdani’s view, was more interested in the superficial allure of “innovation” than in delivering effective, trustworthy public services. The previous administration, under Eric Adams, had been keen to embrace new technologies, often with great fanfare, but seemingly without the necessary due diligence or understanding of their inherent limitations, especially in critical, legally sensitive areas.

This incident also serves as a cautionary tale in the broader global discourse surrounding artificial intelligence in government and public service. While AI promises efficiency and transformative potential, its application in domains that directly impact citizens’ rights, livelihoods, and legal standing demands extreme caution. The challenges are numerous: ensuring data quality, mitigating algorithmic bias, establishing clear lines of accountability, and maintaining transparency in decision-making processes. The MyCity chatbot’s failure highlights the critical need for robust testing, human oversight, and a clear understanding of an AI’s limitations before it is unleashed on the public. Blind adoption of AI, driven by hype rather than genuine utility and ethical considerations, can lead to costly failures and erode public trust in both technology and government institutions.

Mamdani’s move signifies a pivot for NYC’s approach to technology. It suggests a departure from an era of uncritical tech adoption towards a more discerning and responsible strategy. While the city won’t likely shy away from technology altogether, future implementations will undoubtedly face stricter scrutiny, focusing on proven utility, ethical implications, and rigorous validation. The “unplugging” of the MyCity chatbot is a symbolic act, marking the end of a flawed experiment and the beginning of an administration that prioritizes tangible results and the well-being of its constituents over ill-conceived digital initiatives.

In conclusion, Mayor Mamdani’s decisive action to shut down New York City’s disastrous AI chatbot underscores a commitment to fiscal responsibility and practical, trustworthy governance. The chatbot, a costly, ineffective, and legally perilous tool, became a potent symbol of the previous administration’s missteps. Its removal sends a clear message: while technology, particularly AI, holds immense promise, it is merely a tool that requires careful management, rigorous testing, and an unwavering commitment to accuracy and public welfare. New York City, under Mamdani, appears ready to learn from past mistakes and forge a path forward that leverages innovation responsibly, ensuring that technology serves its citizens, rather than misleads them.