Deepfakes are realistic AI-generated images, audio, and videos that mimic real people and appear authentic. The perceived authenticity of the AI content makes it a potent force in deceiving the users.
Deepfakes are essentially fake content that is so identical to the original ones that it poses opportunities and risks in every digital medium. As per an expert estimate, AI-assisted fraud could cost about $ 1 trillion in just one year.
Deepfakes are realistic AI-generated images, audio, and videos that mimic real people and appear authentic. The perceived authenticity of the AI content makes it a potent force in deceiving the users.
Deepfakes are essentially fake content that is so identical to the original ones that it poses opportunities and risks in every digital medium. As per an expert estimate, AI-assisted fraud could cost about $ 1 trillion in just one year.
Besides the financial costs that deepfakes poses, it also reduces the credibility of digital platforms, social media, journalism, and the entertainment sector.
When high-quality generative AI can produce fake content at a fraction of the cost of the original, content creators face the risk of obsolescence. When the average cost of creating a deepfake is just $1.33, deepfakes find many applications in multiple sectors and can even replace human intervention.
With Deepfakes generated by AI, miscreants are armed with new forms of fraud. Deepfakes can orchestrate complex financial scams by impersonating high-ranking officials, leading to substantial losses.
In 2019, a major UK energy company was conned when a senior executive transferred €220K ($243K) to a Hungarian supplier after listening to an audio deepfake of the CEO’s voice. The executive acted on the instructions, believing it to be the CEO, even though it was a fake recording on the other side.
The reputational damage caused by deepfakes can be severe. Businesses and individuals targeted by malicious deepfake content face significant costs related to legal fees, public relations efforts, and potential loss of business. Legal battles to combat the creators and distributors of deepfakes add to these expenses. In the case of the abovementioned UK energy company, when the incident of wrongful transfer came to light, the customers expressed concerns about the company’s ability to secure their data and financial information.
The Deepfake fraud can not just dupe the company and inflict direct losses; it can also lead to indirect losses due to perceived risks by the customers, suppliers, etc. For instance, a significant bank duped of money can’t reveal it publicly because of the risk of anxious customers rushing to withdraw their deposits, leading to a bank run. The bank and regulators would prefer to take action privately rather than risk bankrupting the institution by making the incident public. To reduce reputation loss at an individual level, the UK has made legislative changes to criminalize the sharing or threatening to share intimate deepfakes. The US has already introduced two bills, namely Preventing Deepfakes of Intimate Images Act and Disrupt Eplicit Forged Images and Non-Consensual Edits(or DEFIANCE Act), to enable victims to take civil action against persons involved in creating and distributing Deepfakes.
Source: NBC News YouTube Channel,
Scarlett Johansson appear in deepfake ads against their will
The media and entertainment industry experiences both positive and negative impacts from deepfakes. Creatively, deepfakes can reduce production costs and open new possibilities in film and advertising. Conversely, issues like copyright infringement and loss of trust can lead to revenue losses and legal challenges. Politicians, sportspersons, actors, celebrities, and public figures must remain alert to the possibility of deepfakes ruining their reputations. In 2018, graphic scenes of Hollywood star Scarlett Johansson went viral where one deepfake video described as “leaked” footage was watched on a primary porn site 1.5 million times. The deepfake video was convincingly lifelike and tricked her fans into believing it was an actual video. Johansson is one of the world’s highest-paid actresses, and deepfakes like that pose significant risks to her brand equity.
Deepfakes can destabilize political environments by spreading misinformation and propaganda. This instability affects market stability, investor confidence, and overall economic growth. Governments may need to allocate significant resources to counteract these threats, increasing public expenditure. In London, a deepfake of the mayor making inflammatory comments on the Israel-Palestine issue riled up the citizens. Another problem with deepfake is when a real video is mistaken for deepfake, as in the case of Gabon President Ali Bongo. The Gabonese government released a video to dispel rumours that the President had fallen ill. After the release of the video, the suspicion that it was a deepfake fuelled more tension and suspicion, leading to a coup attempt a week later.
Source: Bleeping computer.com,
Deepfake video of Elon Musk promoting crypto scam
Deepfakes can manipulate financial markets. A fake video of a company executive spreading false information can lead to stock price fluctuations, causing substantial financial losses for investors and market participants. A deepfake video of Elon Musk promoting a new cryptocurrency scam went viral. The video claimed that Musk owns the trading platform. The market for that cryptocurrency was manipulated due to a supposed endorsement by a credible personality.
The rise of deepfakes necessitates new types of insurance coverage, such as policies against digital identity theft and fraud. Insurance companies face challenges in pricing these risks accurately and may see increased claims, leading to higher premiums and policy adjustments. Insurance companies face heightened risks of accident claims by using deepfake videos to justify their demand. Last year, Deepfakes were found circulated on Reddit of photos of the completely fake Great Cascadia earthquake. The 20 images accompanying the post seemed like an actual historical event of an earthquake of magnitude 9.1. The devastation looked so real that Reddit pushed it to the front page, where people were found commenting without realizing it was a fake. Deepfakes like this pose an existential threat to Insurance companies whose task is to insure property and minimize risks.
Fake devastation in Seattle from a fake earthquake
imagined by AI-image creator Midjourney
Deepfakes are a significant cybersecurity threat. Organizations must invest heavily in technologies and expertise to detect and counteract these sophisticated fake media. These investments can run into millions of dollars for large entities, including advanced AI detection systems and hiring cybersecurity professionals. Media companies would have to invest heavily in ensuring that their brand name isn’t used to create deepfake content that is disseminated to spread fake news. Cybercriminals are expected to use generative AI to carry out phishing attacks. Phishing is the top infection vector, and it is estimated that AI-enabled cyber attacks will increase once a single AI technology approaches the 50% market share threshold. Cybercriminals will utilize AI to craft convincing messages for phishing attacks, which will take only a few minutes to generate.
A survey by localcircles discovered that 30 per cent of the citizens opined that about 1/4th of all videos they watched were later found to be fake. Deepfakes have not just infiltrated the internet but also reduced the believability of content. What was earlier trolled as WhatsApp University information for its misleading nature has afflicted every sector. Even though the government has proposed a 36-hour timeframe for platforms to remove deepfake videos, 56 per cent of survey respondents feel it should be reduced to 24 hours. The economic impact of Deepfake videos in terms of regulations is enormous, even though it’s difficult to calculate. Robust legal frameworks and international cooperation are essential to mitigate these economic impacts. Governments and organizations must invest in public education and awareness campaigns about the risks of deepfakes. Advancing technological solutions for deepfake detection and developing ethical guidelines for AI use are crucial steps in minimizing negative economic impacts.
Deepfakes present innovative opportunities but also significant economic challenges. Coordinated efforts from multiple stakeholders are required to address these issues effectively. By understanding the economic impact of deepfakes and implementing strategic measures, we can harness the benefits while mitigating the risks of this transformative technology.
-Abhijeet Zilpelwar (Co-founder & CTO, pi-labs.ai)
abhijeet@pi-labs.ai
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