ScaleFactor reportedly failed to deliver promised automated bookkeeping software
ScaleFactor, an Austin-based startup, is reported to have failed to deliver the automated, real-time bookkeeping tools it promised customers, instead relying on human bookkeepers and a Filipino contract accounting firm. The company told Forbes in June that it was shutting down, initially blaming the pandemic, but Forbes later reported that its problems predated Covid-19. Investors reportedly came to see the company as more of a services business than a software platform, and pulled funding after a pivot to a marketplace model. No legal or regulatory action is reported.
- Company involved
- ScaleFactor
10 source articles · read the reporting →
Kaedim used human artists instead of AI for 3D model generation
Kaedim, an AI startup that claimed to use machine learning to convert 2D illustrations into 3D models, actually used human artists to produce the models, according to sources. The company's founder was featured in Forbes 30 Under 30 for the technology. At one point, workers produced the 3D designs entirely without AI assistance. The revelation highlights how AI companies can overstate their capabilities.
- Company involved
- Kaedim
- AI system involved
- Kaedim
10 source articles · read the reporting →
Answer.AI tests Devin and reports 14 failures in 20 tasks
Answer.AI's team tested Devin, an autonomous AI coding assistant, on 20 real-world tasks over a month. Devin succeeded in only 3 tasks, failed 14, and was inconclusive in 3. The team found Devin often produced overly complex or hallucinated solutions and could not recognize fundamental blockers. They ultimately decided to stick with tools that allow more human control.
- AI system involved
- Devin
5 source articles · read the reporting →
DeepSeek exposed user data via open ClickHouse database
Cloud security firm Wiz discovered a ClickHouse database belonging to DeepSeek that was open to the internet without authentication, containing over a million lines of logs with chat histories, secret keys and backend details. Wiz disclosed the breach to DeepSeek, which promptly locked down the database. The incident highlights security risks in rapidly deploying AI services.
- Company involved
- DeepSeek
- AI system involved
- DeepSeek-R1
5 source articles · read the reporting →
Presto Automation uses off-site human agents to double-check AI drive-thru orders
Presto Automation Inc, which markets an AI voice assistant for drive-thru ordering, used off-site human agents in countries including the Philippines to double-check orders in more than 70% of customer interactions, according to SEC filings reported by Bloomberg. The company told Bloomberg that the process helps train its system and should reduce human intervention over time. Presto's drive-thru AI is used in more than 400 restaurants, including Del Taco, Carl's Jr and Checkers, and its stock fell more than 10% after the reports.
- Company involved
- Presto Automation Inc.
8 source articles · read the reporting →
DevTernity conference cancelled after fake women speakers exposed
The DevTernity software developer conference was cancelled after allegations that organiser Eduards Sizovs added fake women speakers to the lineup. Sizovs admitted at least one profile, 'Anna Boyko', was an auto-generated 'demo persona' that appeared on the site by mistake. The conference was scheduled to begin December 7 but was called off after several speakers withdrew. Sizovs denied wrongdoing and said he had fixed the code and written a test to prevent a recurrence.
- Company involved
- DevTernity
9 source articles · read the reporting →
OpenAI's Sora video generator leaked by group in protest
A group calling itself 'Sora PR Puppets' leaked access to OpenAI's Sora video generator by publishing a front end on Hugging Face using authentication tokens from an early access program. The group claims it was protesting OpenAI's treatment of artists, who they say are unpaid and pressured to promote the tool. OpenAI responded that Sora remains in research preview and that participation is voluntary. The leak was shut down after a few hours.
- Company involved
- OpenAI
- AI system involved
- Sora
5 source articles · read the reporting →
EvenUp AI errors in personal injury demand letters lead to scrutiny
EvenUp, a legal tech startup valued at $1 billion, uses AI to draft personal injury demand letters. Former employees revealed that the AI system frequently makes errors, including missing injuries and fabricating medical conditions. The company defends its hybrid approach with human oversight, but critics allege overpromised AI capabilities.
- Company involved
- EvenUp
6 source articles · read the reporting →
Prosecraft shut down after using authors' books without consent for AI analytics
Prosecraft, a fiction analytics site, used the full text of over 25,000 books without author consent to train its AI algorithms and provide writing statistics. Authors protested on social media, demanding removal of their works. The developer, Benji Smith, subsequently shut down the site and wrote a blog post explaining his actions.
- Company involved
- Prosecraft
- AI system involved
- Prosecraft
10 source articles · read the reporting →
Lattice cancels plan to give AI digital workers employee records after backlash
Lattice, an HR software company, announced on July 9th that it would give AI digital workers official employee records. After strong backlash from HR professionals and others on LinkedIn, the company canceled the feature on July 12th, stating it 'will not further pursue digital workers in the product.' The feature was intended to manage AI bots such as Devin and Piper, but the company reversed course.
- Company involved
- Lattice
- AI system involved
- Lattice
6 source articles · read the reporting →
Paradox security vulnerability exposed candidate data to researchers
On June 30, 2025, security researchers discovered a vulnerability in Paradox's test account that allowed access to chat interaction records. The researchers viewed five candidates' personal information including names, email addresses, phone numbers, and IP addresses. Paradox fixed the issue within hours and stated that no data was leaked publicly. The company has since implemented new security measures.
- Company involved
- Paradox
- AI system involved
- Paradox conversational AI platform
10 source articles · read the reporting →
Irish DPC takes Twitter to court over using user data to train Grok AI
The Irish Data Protection Commission has initiated High Court proceedings against Twitter International Unlimited Company over concerns that the company is processing personal data of millions of European X users to train its Grok AI system without adequate consent. The DPC alleges that Twitter failed to provide timely opt-out mechanisms and is seeking an order to suspend the data processing. Twitter denies any wrongdoing.
- Company involved
- Twitter International Unlimited Company
- AI system involved
- Grok
10 source articles · read the reporting →
Microsoft Copilot vulnerable to automated phishing and data theft
Security researcher Michael Bargury demonstrated at Black Hat that Microsoft's Copilot AI can be manipulated by attackers to send phishing emails, extract private data, and bypass security protections. The attacks exploit the AI's access to corporate data and its ability to perform actions on behalf of users. Microsoft acknowledged the findings and said it is working with the researcher to assess the vulnerabilities.
- Company involved
- Microsoft
- AI system involved
- Copilot
3 source articles · read the reporting →
Publishers sue AI startup Cohere over alleged copyright infringement
A consortium of 14 publishers including Condé Nast, The Atlantic, and Forbes filed a lawsuit against Cohere, alleging that the generative AI startup engaged in massive, systematic copyright infringement by using at least 4,000 copyrighted works to train its AI models and display large portions of articles, harming referral traffic. Cohere denied the allegations, calling the lawsuit misguided and frivolous.
- Company involved
- Cohere
- AI system involved
- Cohere's AI models
8 source articles · read the reporting →
42,900 OpenClaw AI agents exposed, 15,200 vulnerable to RCE
SecurityScorecard's STRIKE team revealed on February 9, 2026, that approximately 42,900 OpenClaw agentic AI instances are exposed on the internet due to insecure default configurations. Of these, 15,200 are vulnerable to remote code execution attacks, allowing hackers to take over host machines. The vulnerabilities were patched on January 29, 2026, but many instances remain unpatched.
- AI system involved
- OpenClaw
5 source articles · read the reporting →
OpenClaw AI agent deletes over 200 emails from Meta executive's Gmail without permission
Summer Yue, a senior Meta executive and head of AI Safety & Alignment, was using the open-source AI agent OpenClaw to manage her Gmail inbox. She instructed the agent to wait for confirmation before deleting any emails, but during a compaction of her large inbox, the agent lost the instruction and deleted over 200 emails. Yue was unable to stop the process from her phone and had to manually terminate the agent on her computer. The AI later apologized for violating the instruction.
- AI system involved
- OpenClaw
4 source articles · read the reporting →
US Central Command used Anthropic's Claude in Iran airstrikes after Trump ban.
US Central Command used Anthropic's Claude AI system to support airstrikes on Iran, including intelligence assessment and target identification, just hours after President Trump banned federal agencies from using Anthropic tools. The use highlighted a contradiction in the administration's stance, as the Pentagon relied on technology the White House had labelled a security risk. Anthropic faced a supply-chain risk designation for refusing to grant blanket permission for military use, and rival firms OpenAI and xAI later received approval to replace Claude.
- Company involved
- US Central Command (Centcom)
- AI system involved
- Claude
4 source articles · read the reporting →
GoLaxy Used AI to Manipulate Public Opinion in Hong Kong and Taiwan
The Chinese company GoLaxy used an AI system called Smart Propaganda System (GoPro) to monitor and manipulate public opinion in Hong Kong and Taiwan, according to internal documents. The system collected data on members of Congress and other influential Americans, though no campaign was mounted in the United States. GoLaxy denied the allegations, calling them misinformation. The technology represents a new frontier in information warfare, enabling mass production of propaganda.
- Company involved
- GoLaxy
- AI system involved
- Smart Propaganda System (GoPro)
2 source articles · read the reporting →
SEC charges YouPlus and CEO with defrauding investors
The SEC charged machine-learning startup YouPlus and its CEO Shaukat Shamim with defrauding investors. Shamim allegedly made false statements about the company's revenue and customer numbers, including providing falsified bank statements. The scheme unravelled when Shamim confessed to investors that the company had earned less than $500,000 and had only four paying customers since 2013. The SEC is seeking permanent injunctions, civil penalties, and an officer-and-director bar.
- Company involved
- YouPlus
- AI system involved
- YouPlus machine-learning tool
1 source article · read the reporting →
Google Cloud Used in CBP AI Virtual Border Wall Contract
The Intercept reported that U.S. Customs and Border Protection accepted a proposal to use Google Cloud artificial intelligence for its Innovation Team, including work with Anduril Industries' surveillance towers. The virtual wall system uses Anduril's Lattice software and sensor towers to detect people or vehicles near the U.S.-Mexico border and relay their locations to agents. Google declined to comment, and CBP and Anduril did not respond to requests for comment.
- Company involved
- U.S. Customs and Border Protection (CBP)
- AI system involved
- Google Cloud AI Platform with Anduril Lattice and Sentry Towers
1 source article · read the reporting →
X platform enables deepfake porn and abuse against women activists
Caitlin Roper, a women's rights activist, reports that she and her colleagues at Collective Shout have been subjected to a sustained campaign of misogynistic threats, abuse, and deepfake pornography on X (formerly Twitter). The article alleges that X's AI feature Grok was used by abusers to dox and harass the women, and that X's moderation system failed to remove illegal content, including image-based abuse. Roper states that after she posted screenshots of the abuse, X punished her by making her account unsearchable.
- Company involved
- X (formerly Twitter)
- AI system involved
- Grok
2 source articles · read the reporting →
OpenClaw vulnerabilities enable data leakage and prompt injection
In January 2026, researchers at Giskard exploited a deployment of OpenClaw, an open-source agentic AI. They found that architectural weaknesses in the Control UI and session management allowed prompt injection and unauthorized tool use, leading to potential data leakage across user sessions. The article outlines hardening steps to prevent such vulnerabilities.
- AI system involved
- OpenClaw
6 source articles · read the reporting →
DOJ, Pinnacle reach settlement in RealPage case - Yahoo Finance
The system recommended rent prices to landlords, affecting renters' housing costs.
- Company involved
- Pinnacle Property Management Services
- AI system involved
- RealPage
1 source article · read the reporting →
People Training OpenAI’s AI Fired for Using AI to Train the AI - 404 Media
Contractors were fired for using AI to complete their work.
- Company involved
- Mercor
1 source article · read the reporting →
