China Cracks Down on AI Amid Rise in Deepfake Scams

China has reportedly heightened scrutiny of “deepfake” tech amid a rise in artificial intelligence (AI)-driven fraud.

Worries about the potential for AI to assist in financial crimes have grown following a case in which a man was scammed into giving money to a fraudster posing as a friend, Reuters reported Monday (May 22).

Police in Baotou said, per the report, the scammer, with the help of AI-powered face-swapping technology, masqueraded as a friend of the victim’s during a video call to get his hands on a 4.3 million yuan (about $612,000) transfer.

The victim only realized he had been tricked when his friend didn’t know what he was talking about. Authorities had recovered most of the stolen money and were working to track down the rest, according to the report.

The case prompted discussion on the social media platform Weibo, where the trending topic “#AI scams are exploding across the country” racked up more than 120 million views Monday, the report said.

“This shows that photos, voices and videos all can be utilized by scammers,” one user wrote, per the report. “Can information security rules keep up with these people’s techniques?”

That’s a question being asked all over the globe these days as companies increasingly add AI-powered functions to their products, with the technology — as PYMNTS’ Karen Webster wrote Monday — becoming “the ticket for everyone’s 15 minutes of fame.”

How the technology will be regulated is being debated by policymakers worldwide. Last week, a U.S. Senate subcommittee heard from Sam Altman, CEO of ChatGPT maker OpenAI, who stressed that “regulation of AI is essential.”

Altman added that his company is “eager to help policymakers as they determine how to facilitate regulation that balances incentivizing safety while ensuring that people are able to access the technology’s benefits.”

Over the weekend, the leaders of the G7 nations announced in a bulletin that they want to hold talks on reaching a “common vision and goal of trustworthy AI.”

Meanwhile, deepfake technology has proven to be a popular investment for the venture capital world. VC funds invested $187.7 million into companies working on deepfake technology in 2022 — up from $1 million in 2017.