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AI is supercharging election disinformation worldwide

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Artificial intelligence is supercharging the threat of election disinformation worldwide, making it easy for anyone with a smartphone and a devious imagination to create fake – but convincing – content aimed at fooling voters.

It marks a quantum leap from a few years ago, when creating phony photos, videos or audio clips required teams of people with time, technical skill and money. Now, using free and low-cost generative artificial intelligence services from companies like Google and OpenAI, anyone can create high-quality “deepfakes” with just a simple text prompt.

A wave of AI deepfakes tied to elections in Europe and Asia has coursed through social media for months, serving as a warning for more than 50 countries heading to the polls this year.

“You don’t need to look far to see some people … being clearly confused as to whether something is real or not,” said Henry Ajder, a leading expert in generative AI based in Cambridge, England.

The question is no longer whether AI deepfakes could affect elections, but how influential they will be, said Ajder, who runs a consulting firm called Latent Space Advisory.

As the U.S. presidential race heats up, FBI Director Christopher Wray recently warned about the growing threat, saying generative AI makes it easy for “foreign adversaries to engage in malign influence.”

With AI deepfakes, a candidate’s image can be smeared, or softened. Voters can be steered toward or away from candidates — or even to avoid the polls altogether. But perhaps the greatest threat to democracy, experts say, is that a surge of AI deepfakes could erode the public’s trust in what they see and hear.

Some recent examples of AI deepfakes include:

— A video of Moldova’s pro-Western president throwing her support behind a political party friendly to Russia.

— Audio clips of Slovakia’s liberal party leader discussing vote rigging and raising the price of beer.

— A video of an opposition lawmaker in Bangladesh — a conservative Muslim majority nation — wearing a bikini.

The novelty and sophistication of the technology makes it hard to track who is behind AI deepfakes. Experts say governments and companies are not yet capable of stopping the deluge, nor are they moving fast enough to solve the problem.

As the technology improves, “definitive answers about a lot of the fake content are going to be hard to come by,” Ajder said.

Eroding trust

Some AI deepfakes aim to sow doubt about candidates’ allegiances.

In Moldova, an Eastern European country bordering Ukraine, pro-Western President Maia Sandu has been a frequent target. One AI deepfake that circulated shortly before local elections depicted her endorsing a Russian-friendly party and announcing plans to resign.

Officials in Moldova believe the Russian government is behind the activity. With presidential elections this year, the deepfakes aim “to erode trust in our electoral process, candidates and institutions — but also to erode trust between people,” said Olga Rosca, an adviser to Sandu. The Russian government declined to comment for this story.

China has also been accused of weaponizing generative AI for political purposes.

In Taiwan, a self-ruled island that China claims as its own, an AI deepfake gained attention earlier this year by stirring concerns about U.S. interference in local politics.

The fake clip circulating on TikTok showed U.S. Rep. Rob Wittman, vice chairman of the U.S. House Armed Services Committee, promising stronger U.S. military support for Taiwan if the incumbent party’s candidates were elected in January.

Wittman blamed the Chinese Communist Party for trying to meddle in Taiwanese politics, saying it uses TikTok — a Chinese-owned company — to spread “propaganda.”

A spokesperson for the Chinese foreign ministry, Wang Wenbin, said his government doesn’t comment on fake videos and that it opposes interference in other countries’ internal affairs. The Taiwan election, he stressed, “is a local affair of China.”

Blurring reality

Audio-only deepfakes are especially hard to verify because, unlike photos and videos, they lack telltale signs of manipulated content.

In Slovakia, another country overshadowed by Russian influence, audio clips resembling the voice of the liberal party chief were shared widely on social media just days before parliamentary elections. The clips purportedly captured him talking about hiking beer prices and rigging the vote.

It’s understandable that voters might fall for the deception, Ajder said, because humans are “much more used to judging with our eyes than with our ears.”

In the U.S., robocalls impersonating U.S. President Joe Biden urged voters in New Hampshire to abstain from voting in January’s primary election. The calls were later traced to a political consultant who said he was trying to publicize the dangers of AI deepfakes.

In poorer countries, where media literacy lags, even low-quality AI fakes can be effective.

Such was the case last year in Bangladesh, where opposition lawmaker Rumeen Farhana — a vocal critic of the ruling party — was falsely depicted wearing a bikini. The viral video sparked outrage in the conservative, majority-Muslim nation.

“They trust whatever they see on Facebook,” Farhana said.

Experts are particularly concerned about upcoming elections in India, the world’s largest democracy and where social media platforms are breeding grounds for disinformation.

A challenge to democracy

Some political campaigns are using generative AI to bolster their candidate’s image.

In Indonesia, the team that ran the presidential campaign of Prabowo Subianto deployed a simple mobile app to build a deeper connection with supporters across the vast island nation. The app enabled voters to upload photos and make AI-generated images of themselves with Subianto.

As the types of AI deepfakes multiply, authorities around the world are scrambling to come up with guardrails.

The European Union already requires social media platforms to cut the risk of spreading disinformation or “election manipulation.” It will mandate special labeling of AI deepfakes starting next year, too late for the EU’s parliamentary elections in June. Still, the rest of the world is a lot further behind.

The world’s biggest tech companies recently — and voluntarily — signed a pact to prevent AI tools from disrupting elections. For example, the company that owns Instagram and Facebook has said it will start labeling deepfakes that appear on its platforms.

But deepfakes are harder to rein in on apps like the Telegram chat service, which did not sign the voluntary pact and uses encrypted chats that can be difficult to monitor.

Some experts worry that efforts to rein in AI deepfakes could have unintended consequences.

Well-meaning governments or companies might trample on the sometimes “very thin” line between political commentary and an “illegitimate attempt to smear a candidate,” said Tim Harper, a senior policy analyst at the Center for Democracy and Technology in Washington.

Major generative AI services have rules to limit political disinformation. But experts say it remains too easy to outwit the platforms’ restrictions or use alternative services that don’t have the same safeguards.

Even without bad intentions, the rising use of AI is problematic. Many popular AI-powered chatbots are still spitting out false and misleading information that threatens to disenfranchise voters.

And software isn’t the only threat. Candidates could try to deceive voters by claiming that real events portraying them in an unfavorable light were manufactured by AI.

“A world in which everything is suspect — and so everyone gets to choose what they believe — is also a world that’s really challenging for a flourishing democracy,” said Lisa Reppell, a researcher at the International Foundation for Electoral Systems in Arlington, Virginia.



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Brazilians rally to protest supreme court judge’s decision to ban X

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Tens of thousands of Brazilians joined an independence day rally called by members of the rightwing opposition in protest against a supreme court judge who banned Elon Musk’s social media platform X in the country. 

Dressed in the national colours of yellow and green, attendees at Saturday’s demonstration in São Paulo held posters demanding the removal of justice Alexandre de Moraes, who has attracted controversy for a wide-ranging crackdown on digital disinformation. 

“I came here today in favour of freedom of expression. The constitution is being violated,” said 25 year-old radiologist Mayara Ribeira, wearing the shirt of the Brazilian football team. “The judge should be impeached”. 

X went offline in Latin America’s most populous nation just over a week ago after it ignored court orders to block certain accounts suspected of spreading falsehoods, many belonging to supporters of former hard-right president Jair Bolsonaro. 

It affected some 20mn users and marked an escalation of a months-long row over takedown decrees between Musk and Moraes, whom the tech entrepreneur has accused of censorship. 

“I don’t want anybody to be silenced, if they are leftwing or rightwing,” said retiree Elayne Nunes, 58, who travelled from the neighbouring state of Minas Gerais. “I’m happy that Elon Musk has brought to international attention what is happening in Brazil”.

The case has turned into a cause célèbre in the global debate about online free speech and energised Brazil’s populist conservative movement, which claims to be unfairly targeted by the judge. 

Allies of Moraes frame his actions as necessary to safeguard democracy against fake news, but opponents accuse him of eroding liberties. 

The blackout of X has divided opinion in Brazil. A survey by AtlasIntel found nearly 51 per cent of respondents disagreed with the ban, versus just over 48 per cent in favour.

Speakers at the event on Avenida Paulista urged senators to launch an impeachment of the judge, who has also become a target for wider criticisms that Brazil’s supreme court is overreaching its legal limits. 

They also appealed for an amnesty for people arrested in connection with the storming of government buildings in Brasília on January 8, 2023 by radical Bolsonaro supporters. 

Many of the rioters called for a military coup against leftwing president Luiz Inácio Lula da Silva, who defeated Bolsonaro in the previous year’s election. 

“I hope that the federal senate puts a stop to this dictator Alexandre de Moraes, who does more harm to Brazil than Luiz Inácio Lula da Silva himself,” Bolsonaro said on stage. 

The ex-president faces a number of supreme court investigations from his time in office, including over an alleged coup plot — that was never implemented — to stay in power.

Researchers at the University of São Paulo estimated there were 45,400 people at Saturday’s event in Brazil’s largest city.

The trigger for X’s suspension was its failure to meet a deadline set by Moraes to appoint a new legal representative in the country, as required by domestic law. Musk had closed the company’s local office last month in protest at the judge’s orders. 

In his decision to block access to the platform, Moraes said X was seeking to create an environment of “total impunity” and a “lawless land” on Brazilian social media ahead of municipal elections next month.

Creomar de Souza at consultancy Dharma Political Risk said impeachment of the justice was unlikely for now: “It looks like we’re in for a long battle between Moraes and political forces in Brazil and abroad”.



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Russia economy: Relying more China’s yuan is backfiring

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After the U.S. and its allies sanctioned Russia in 2022 for its invasion of Ukraine, Moscow turned away from the dollar and euro in international transactions and relied more on China’s yuan.

That coincided with more trade between the two countries as Russia was largely shut out of Western markets as well as the global financial system.

By June, the yuan accounted for 99.6% of the Russian foreign exchange market, according to Bloomberg, which cited data from Russia’s central bank. And Russian commercial banks ramped up corporate loans denominated in yuan.

But this dependence on the yuan is now backfiring as top Russian banks are running out of the Chinese currency, Reuters reported on Thursday.

“We cannot lend in yuan because we have nothing to cover our foreign currency positions with,” German Gref, CEO of top Russian lender Sberbank, said at an economic forum.

That’s because the U.S. expanded its definition of Russia’s military industry earlier this year, thereby widening the potential scope of Chinese firms that could get hit with secondary sanctions for doing business with Moscow.

As a result, Chinese banks have been reluctant to transfer yuan to Russian counterparts while servicing foreign trade payments, leaving transactions in limbo for months. With yuan liquidity drying up from China, Russian companies have tapped the central bank for yuan via currency swaps.

At the start of this month, banks raised a record 35 billion yuan from Russian’s central bank through these swaps, according to Reuters. And banks were expecting more help.

“I think the central bank can do something,” Andrei Kostin, CEO of second-largest bank VTB, said Thursday. “They hopefully understand the need to increase the liquidity offer through swaps.”

But on Friday, Russia’s central bank dashed those hopes, calling on banks to curb corporate loans denominated in yuan.

The Bank of Russia also said in a report that swaps are only meant for short-term stabilization of the domestic currency market and are not a long-term source of funding, according to Bloomberg. But rather than simply filling the roles that dollars and euros did, yuan loans have expanded.

“The increase in yuan lending was partly caused by the replacement of loans in ‘toxic’ currencies, but 41% of the increase was down to new currency loans,” the bank said.

The central bank also released a survey that showed a quarter of Russian exporters had trouble with foreign counterparts, including blocked or returned payments even when dealing in supposedly friendly countries. And about half of exporters said the problems got worse in the second quarter from the prior quarter.

The overall Russian economy has been propped up by the government’s wartime spending as well as oil exports to China and India. But the combination of busy factories and labor shortages due to military mobilizations have stoked more inflation.

Researchers led by Yale’s Jeffrey Sonnenfeld warned the seemingly robust GDP data mask deeper problems in the economy.

“Simply put, Putin’s administration has prioritized military production over all else in the economy, at substantial cost,” they wrote. “While the defense industry expands, Russian consumers are increasingly burdened with debt, potentially setting the stage for a looming crisis. The excessive focus on military spending is crowding out productive investments in other sectors of the economy, stifling long-term growth prospects and innovation.”

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ETFs are set to hit record inflows, but this wild card could change it

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ETF Edge, September 4, 2024

Exchange-traded fund inflows have already topped monthly records in 2024, and managers think inflows could see an impact from the money market fund boom before year-end.

“With that $6 trillion plus parked in money market funds, I do think that is really the biggest wild card for the remainder of the year,” Nate Geraci, president of The ETF Store, told CNBC’s “ETF Edge” this week. “Whether it be flows into REIT ETFs or just the broader ETF market, that’s going to be a real potential catalyst here to watch.”

Total assets in money market funds set a new high of $6.24 trillion this past week, according to the Investment Company Institute. Assets have hit peak levels this year as investors wait for a Federal Reserve rate cut.

“If that yield comes down, the return on money market funds should come down as well,” said State Street Global Advisors’ Matt Bartolini in the same interview. “So as rates fall, we should expect to see some of that capital that has been on the sidelines in cash when cash was sort of cool again, start to go back into the marketplace.”

Bartolini, the firm’s head of SPDR Americas Research, sees that money moving into stocks, other higher-yielding areas of the fixed income marketplace and parts of the ETF market.

“I think one of the areas that I think is probably going to pick up a little bit more is around gold ETFs,” Bartolini added. “They’ve had about 2.2 billion of inflows the last three months, really strong close last year. So I think the future is still bright for the overall industry.”

Meanwhile, Geraci expects large, megacap ETFs to benefit. He also thinks the transition could be promising for ETF inflow levels as they approach 2021 records of $909 billion.

“Assuming stocks don’t experience a massive pullback, I think investors will continue to allocate here, and ETF inflows can break that record,” he said.

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