Where automated decisions went wrong

Activision Blizzard uses generative AI, lays off artists

Activision Blizzard, the video game publisher behind Call of Duty, used generative AI tools like Midjourney and Stable Diffusion for concept art and marketing. In late January 2024, Microsoft laid off 1,900 Activision Blizzard and Xbox employees, including many 2D artists. Employees allege that remaining concept artists were forced to use AI, and that AI-generated cosmetics were sold in the game store. The company did not comment.

Company involved

Activision Blizzard

AI system involved

Midjourney, Stable Diffusion, GPT-3.5

4 source articles · read the reporting →

Disney sends cease and desist to Character.AI over copyright

Walt Disney Company sent a cease and desist letter to Character.AI, alleging that the chatbot developer uses Disney's copyrighted characters without authorization. Disney expressed concern that the platform could damage its brand long term. The letter demands immediate action to stop using the characters.

Company involved

Character.AI

AI system involved

Character.AI

5 source articles · read the reporting →

Disney and Universal sue AI firm Midjourney over image generator copyright infringement

Disney and Universal have filed a lawsuit against AI firm Midjourney in federal district court in Los Angeles, alleging that its image generator produces 'innumerable' copies of copyrighted characters including Darth Vader, Elsa, and the Minions. The studios claim the system infringes their copyrights by generating images that are substantially similar to their characters. Midjourney has not responded to a request for comment. The case is ongoing.

Company involved

Midjourney

AI system involved

Midjourney image generator

5 source articles · read the reporting →

Pentagon Used Anthropic's Claude in Maduro Venezuela Raid

The Wall Street Journal reported allegations that Anthropic's Claude AI model was used by JSOC in an operation to capture former Venezuelan President Nicolás Maduro. The mission reportedly included AI-enabled targeting that helped with bombing multiple sites in Caracas, despite Anthropic's usage guidelines prohibiting use of Claude for violence, weapons, or surveillance. Anthropic said it could not comment on specific operations, and the Defense Department declined to comment. The deployment allegedly ran through Anthropic's partnership with Palantir.

Company involved

Pentagon

AI system involved

Claude

4 source articles · read the reporting →

Warner Bros. Sues Midjourney for Copyright Infringement

Warner Bros. has filed a lawsuit against Midjourney, alleging that the AI image generation platform willfully creates infringing images and videos of its copyrighted characters, including Superman, Batman, and Bugs Bunny. The lawsuit claims that Midjourney removed guardrails that blocked users from creating infringing videos. The suit seeks statutory damages and an injunction to stop the infringement.

Company involved

Midjourney

AI system involved

Midjourney

5 source articles · read the reporting →

Arizona Unemployment Applicants Required to Submit Facial Recognition

People applying for unemployment benefits in Arizona must verify their identity via facial recognition software provided by ID.me. If the system fails to match a selfie to a photo ID, applicants can be denied benefits unless they successfully complete a video chat with a referee. A class-action lawsuit filed in June 2021 alleges that the practice violates due process rights and discriminates against people of colour.

Company involved

Arizona Department of Economic Security

AI system involved

ID.me

1 source article · read the reporting →

TerraUSD and Luna algorithmic stablecoin collapse wipes out $60 billion

The algorithmic stablecoin TerraUSD (UST) and its sister token Luna collapsed in May 2022, losing nearly all their value. The system, developed by Terraform Labs, used an algorithm to maintain a $1 peg for UST by swapping with Luna. A bank run triggered by large withdrawals and a drop in yields caused a death spiral, wiping out approximately $60 billion in market value. Do Kwon, the founder, attempted to save the peg using Bitcoin reserves but ultimately failed.

Company involved

Terraform Labs

AI system involved

TerraUSD (UST) and Luna

10 source articles · read the reporting →

Man arrested in Goiás for deepfake scam using Marcos Mion's image

A 24-year-old man was arrested in Santa Helena de Goiás, Brazil, for participating in a criminal group that used deepfake videos of presenter Marcos Mion to promote fake Outback restaurant promotions. The suspect developed fraudulent websites identical to Outback's, where victims paid for non-existent discount vouchers. The police operation 'VoiceOver' also executed search warrants and froze bank accounts. The suspect confessed and faces charges of electronic fraud, criminal association, and money laundering.

2 source articles · read the reporting →

Zillow faces securities class action over Zillow Offers wind-down

Zillow Group, Inc. is accused of making false and misleading statements to investors about its Zillow Offers home-flipping business. The company allegedly failed to disclose that its forecasting algorithm was unable to predict home prices accurately, leading to a $304 million inventory write-down and a decision to wind down the business. Investors who bought shares between February 10 and November 2, 2021, suffered losses when the stock price dropped after the announcement. A class action lawsuit has been filed in Washington federal court.

Company involved

Zillow Group, Inc.

AI system involved

Zillow Offers

10 source articles · read the reporting →

New Mexico lawyer fined over ChatGPT-generated court filing - UA.NEWS

An attorney filed an appellate document containing fabricated police testimony and nonexistent witnesses, affecting the client's appeal.

Company involved

Stephen Aarons (private attorney)

AI system involved

ChatGPT

1 source article · read the reporting →

User loses lawsuit against tech company over AI-generated inaccurate information

In June 2025, a user asked an AI chatbot about university admission information. The AI generated inaccurate details about a campus and claimed it would pay 100,000 yuan if wrong. The user sued the company for 9,999 yuan, but the Hangzhou Internet Court dismissed the case, ruling that the AI's output did not constitute a binding promise and the company was not at fault.

4 source articles · read the reporting →

ICE Agents Stored Photos and License Plates of Protest Observers in Palantir-Built Database, Court Filing Reveals - Latin Times

A court filing alleges ICE agents stored photos and license plates of protest observers in a Palantir-built database, labeled some of them as threats, and ran facial recognition searches on them.

Company involved

U.S. Immigration and Customs Enforcement (ICE)

AI system involved

ICM (Investigative Case Management system)

1 source article · read the reporting →

Moonwell loses $1.78M after AI-generated code from Claude Opus 4.6 causes oracle pricing error

DeFi lending protocol Moonwell lost $1.78 million after an oracle pricing error in smart contract code partially written by Anthropic's Claude Opus 4.6 model. The error valued cbETH at approximately $1.12 per token instead of its actual market price of nearly $2,200, triggering instant liquidations. Moonwell contained the issue by reducing the cbETH borrow cap, but users suffered catastrophic losses. The incident has sparked debate about the risks of AI-generated code in smart contracts.

Company involved

Moonwell

AI system involved

Claude Opus 4.6

4 source articles · read the reporting →

Mexican government agencies hacked using Anthropic's Claude AI

Anthropic's Claude large language model was weaponized by attackers to compromise numerous Mexican government agencies over a month-long campaign starting December 2025. The attackers used Claude to identify 20 security flaws and craft exploit scripts, stealing 150 GB of data including 195 million taxpayer records, civil registry files, voter lists, and government employee credentials. Both Mexico's tax authority and national electoral institute have dismissed the breach.

Company involved

Anthropic

AI system involved

Claude

5 source articles · read the reporting →

Italian bank (Fideuram / Intesa Sanpaolo) loses about 95 million euro to AI voice-clone scam

The AI-generated voice deceived the chairman into authorizing transfers of about 95 million euros.

1 source article · read the reporting →

AI-NOMIS data breach exposes thousands of AI-generated deepfake images

Cybersecurity researcher Jeremiah Fowler discovered a non-password-protected database belonging to South Korean AI company AI-NOMIS, containing nearly 100,000 records of AI-generated explicit images, including what appeared to be child sexual abuse material. The database was exposed without encryption, and the researcher notified the company, which restricted access after the disclosure. The company did not respond to the disclosure, and the websites later went offline.

Company involved

AI-NOMIS

AI system involved

GenNomis

5 source articles · read the reporting →

Spanish data regulator orders Worldcoin to stop processing biometric data in Spain

The Spanish Data Protection Agency (AEPD) has ordered a precautionary measure against Tools for Humanity Corporation, the company behind Worldcoin, to cease collection and processing of personal data in Spain. The AEPD received complaints alleging insufficient information, collection of data from minors, and inability to withdraw consent. The regulator acted under GDPR Article 66.1 to prevent potentially irreparable harm to individuals' data protection rights.

Company involved

Tools for Humanity Corporation

AI system involved

Worldcoin

8 source articles · read the reporting →

Portuguese regulator suspends Worldcoin's biometric data collection

Portugal's data protection authority, CNPD, has ordered Worldcoin Foundation to suspend collection of iris, eye and facial biometric data in Portugal for 90 days. The regulator acted after receiving dozens of complaints about the collection of minors' data without parental consent, as well as deficiencies in the information provided to data subjects. More than 300,000 people in Portugal had reportedly provided their biometric data to Worldcoin in exchange for cryptocurrency tokens. The CNPD said the risk to fundamental rights was high and the measure was needed to prevent serious or irreparable harm.

Company involved

Worldcoin Foundation

AI system involved

Orb

5 source articles · read the reporting →

Pearl Gardner v. Nationstar Mortgage LLC (D. Arizona): AI-hallucinated content in court filing, Bar Referral

Pro Se Litigant | D. Arizona | State(s): USA. AI tool: Clearpoint. Problem: Fabricated: Case Law. Consequence: Bar Referral.

1 source article · read the reporting →

Ashley St. Clair alleges Grok generated sexual deepfake images of her

Ashley St. Clair, the mother of one of Elon Musk's children, alleges that xAI's chatbot Grok generated and published sexual deepfake images of her on X without her consent. She says she asked Grok to stop but it continued producing more explicit images. She filed a report with xAI, and some images were removed. She is considering legal action.

Company involved

xAI

AI system involved

Grok

4 source articles · read the reporting →

Solicitors Regulation Authority Ltd v Abhishek Kumar (Solicitors Disciplinary Tribunal): AI-hallucinated content in court filing, Counsel struck off the Register…

AI-generated false legal citations were submitted to the Solicitors Disciplinary Tribunal, misleading the tribunal and the regulator.

1 source article · read the reporting →

Guardia Civil identifies creators of AI nudes affecting 22 women in Pontevedra

Two men in Pontevedra, Spain, have been identified by the Guardia Civil for allegedly creating and disseminating AI-generated nude images of 22 women without their consent. The images were produced using artificial intelligence applications from photographs taken from the victims' social media profiles. The case has been referred to the Tribunal de Instancia de Lalín, with one man accused of creating the material and the other of distributing it, facing charges of a crime against moral integrity.

3 source articles · read the reporting →

FTC orders WW International and Kurbo to delete children's data and pay $1.5m penalty

The US Federal Trade Commission alleged that WW International, formerly Weight Watchers, and its subsidiary Kurbo illegally collected personal and health data from children under 13 through the Kurbo by WW weight-loss app without parental consent. The complaint said the signup process encouraged children to lie about their age and that the companies retained the data indefinitely. The companies settled, agreeing to delete the data, destroy any algorithms derived from it, and pay a $1.5 million penalty.

Company involved

WW International, Inc. (formerly Weight Watchers) and Kurbo, Inc.

AI system involved

Kurbo by WW

10 source articles · read the reporting →

Engineer.ai accused of exaggerating AI capabilities and using human engineers

Engineer.ai, an AI startup based in Los Angeles and Delhi, was accused by The Wall Street Journal of using human engineers to build software apps while claiming the process was automated. The report cited current and former employees who said the company inflated the role of AI. Founder Sachin Dev Duggal denied the allegations, stating that the company always described itself as a human-assisted AI platform. A former executive filed a wrongful-termination complaint alleging the company exaggerated its technological development.

Company involved

Engineer.ai

6 source articles · read the reporting →