Ben Colman

Statue of blind justice holding unbalanced scales

Deepfakes in legal fraud unaddressed

Lou Covey

Stopping fraud is a major focus of cybersecurity is criminal fraud. Largely, the industry is winning that war. Nowhere is that protection more successful than in combatting deepfake crime, even though industry marketing is geared to promote fear over success. Where deepfakes are causing the real problem is in legal fraud.

Digital fraud represents 0.02 percent of all fraud claims according the National Crime Insurance Bureau (NCIB). While there is evidence that criminal use of AI is increasing the number of attacks, the number of successful attacks is too low to warrant recording.

Deepfake crime a trifle

The FBI’s Internet Crime Complaint Center (IC3) lumps all forms of online fraud into a single category. Even so, the IC3 fielded 859,532 complaints of suspected internet crime in 2024. Of those complaints, 256,256 incidents resulted in actual monetary losses, representing an average loss of $19,372 per complaint. Overall, the reported losses exceeded $16.6 billion, a 33% increase from 2023. However, the top three cybercrimes in 2024 reported to IC3 were phishing/spoofing, extortion, and personal data breaches. None of those required the use of deepfake technology, and rarely did.

Extrapolating the data from NCIB with IC3’s indicates successful deepfake fraud cases were less than 50 in total in 2024 with 94% of those occurring during a spike of activity between November and December 2024.

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Engineer blowing a popping bubble labeled AI industry

AI bubble about to pop for cybersecurity?

Lou Covey

As quickly as the artificial intelligence (AI) industry appeared, it may disappear just as quickly. That may have significant ramifications for cybersecurity, according to industry watchers, as the technology falls into the trough of disillusionment.

When OpenAI burst on the scene more than two years ago, Microsoft was a significant instigator in its growth and adoption. Microsoft invested billions in the not-for-profit enterprise for early access to cutting-edge AI technologies and helping accelerate OpenAI's research. It transformed its Azure cloud platform into a leading infrastructure provider for AI development, offering specialized hardware (like GPUs and TPUs) and services tailored for machine learning workloads. AI capabilities were embedded across its product suite, and Microsoft Research contributed significantly to AI advancement in computer vision, natural language processing, and deep learning.

All of that came with extreme demands on computing resources. Microsoft began a buying spree in data centers, both to secure resources and build new centers. They even entered into a deal to reopen the notorious Three Mile Island nuclear power plant.

Spree ends

That has all come to an end. As reported in Bloomberg last week, the company decided to scale back data center projects in the UK, Australia, and Indonesia. Data center development in Illinois, North Dakota, and Wisconsin is also canceled. All tolled, Microsoft has walked away from more than 2GW. That’s on top of the news that Microsoft had walked away from two data center projects in the US and Europe, piling on to a February announcement that it was canceling data center leases.

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