Digital identities

The risky rise of all-in-one AI companions

A concerning new trend is emerging: AI companions are merging with mental health tools, blurring ethical lines. Human therapists are required to maintain a professional distance. Yet AI doesn’t follow such rules; it can be both confidant and counsellor.

AI chatbots are increasingly marketed as friendly companions. At the same time, they can offer mental health advice. Combined, you get an AI friend who also becomes your emotional guide. The mix might feel comforting, but it’s not without risks.

Unlike a human therapist, AI has no ethical compass. It mimics caring responses based on patterns, not understanding. One prompt might trigger empathetic advice and best-friend energy, a murky interaction without safeguards.

The deeper issue? There’s little incentive for AI makers to stop this. Blending companionship and therapy boosts user engagement and profits. Unless laws intervene, these all-in-one bots will keep evolving.

There’s also a massive privacy cost. People confide personal feelings to these bots, often daily, for months. The data may be reviewed, stored, and reused to train future models. Your digital friend and therapist might also be your data collector.

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AI’s transformation of work habits, mindset and lifestyle

At Mindvalley’s AI Summit, former Google Chief Decision Scientist Cassie Kozyrkov described AI as not a substitute for human thought but a magnifier of what the human mind can produce. Rather than replacing us, AI lets us offload mundane tasks and focus on deeper cognitive and creative work.

Work structures are being transformed, not just in factories, but behind computer screens. AI now handles administrative ‘work about work,’ multitasking, scheduling, and research summarisation, lowering friction in knowledge work and enabling people to supervise agents rather than execute tasks manually.

Personal life is being reshaped, too. AI tools for finance or health, such as budgeting apps or personalised diagnostics, move decisions into data-augmented systems with faster insight and fewer human biases.

Meanwhile, creativity is co-authored via AI-generated design, music or writing, requiring humans to filter, refine and ideate beyond the algorithm.

Recognising cognitive change, AI thought leaders envision a new era where ‘blended work’ prevails: humans manage AI agents, call the shots, and wield ethical oversight, while the AI executes pipelines of repetitive or semi-intelligent tasks.

Scholars warn that this model demands new fairness, transparency, and collaboration skills.

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Hackers infiltrate Southeast Asian telecom networks

A cyber group breached telecoms across Southeast Asia, deploying advanced tracking tools instead of stealing data. Palo Alto Networks’ Unit 42 assesses the activity as ‘associated with a nation-state nexus’.

A hacking group gained covert access to telecom networks across Southeast Asia, most likely to track users’ locations, according to cybersecurity analysts at Palo Alto Networks’ Unit 42.

The campaign lasted from February to November 2024.

Instead of stealing data or directly communicating with mobile devices, the hackers deployed custom tools such as CordScan, designed to intercept mobile network protocols like SGSN. These methods suggest the attackers focused on tracking rather than data theft.

Unite42 assessed the activity ‘with high confidence’ as ‘associated with a nation state nexus’. The Unit notes that ‘this cluster heavily overlaps with activity attributed to Liminal Panda, a nation state adversary tracked by CrowdStrike’; according to CrowdStrike, Liminal Panda is considered to be a ‘likely China-nexus adversary’. It further states that ‘while this cluster significantly overlaps with Liminal Panda, we have also observed overlaps in attacker tooling with other reported groups and activity clusters, including Light Basin, UNC3886, UNC2891 and UNC1945.’

The attackers initially gained access by brute-forcing SSH credentials using login details specific to telecom equipment.

Once inside, they installed new malware, including a backdoor named NoDepDNS, which tunnels malicious data through port 53 — typically used for DNS traffic — in order to avoid detection.

To maintain stealth, the group disguised malware, altered file timestamps, disabled system security features and wiped authentication logs.

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The US considers chip tracking to prevent smuggling to China

The US is exploring how to build better location-tracking into advanced chips, as part of an effort to prevent American semiconductors from ending up in China.

Michael Kratsios, a senior official behind Donald Trump’s AI strategy, confirmed that software or physical updates to chips are being considered to support traceability.

Instead of relying on external enforcement, Washington aims to work directly with the tech industry to improve monitoring of chip movements. The strategy forms part of a broader national plan to counter smuggling and maintain US dominance in cutting-edge technologies.

Beijing recently summoned Nvidia representatives to address concerns over American proposals linked to tracking features and perceived security risks in the company’s H20 chips.

Although US officials have not directly talked with Nvidia or AMD on the matter, Kratsios clarified that chip tracking is now a formal objective.

The move comes even as Trump’s team signals readiness to lift certain export restrictions to China in return for trade benefits, such as rare-earth magnet sales to the US.

Kratsios criticised China’s push to lead global AI regulation, saying countries should define their paths instead of following a centralised model. He argued that the US innovation-first approach offers a more attractive alternative.

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Moflin, Japan’s AI-powered robot pet with a personality

A fluffy, AI-powered robot pet named Moflin is capturing the imagination of consumers in Japan with its unique ability to develop distinct personalities based on how it is ‘raised.’ Developed by Casio, Moflin recognises its owner and learns their preferences through interactions such as cuddling and stroking, boasting over four million possible personality variations.

Priced at ¥59,400, Moflin has become more than just a companion at home, with some owners even taking it along on day trips. To complement the experience, Casio offers additional services, including a specialised salon to clean and maintain the robot’s fur, further enhancing its pet-like feel.

Erina Ichikawa, the lead developer, says the aim was to create a supportive sidekick capable of providing comfort during challenging moments, blending technology with emotional connection in a new way.

A similar ‘pet’ was also seen in China. Namely, AI-powered ‘smart pets’ like BooBoo are gaining popularity in China, especially among youth, offering emotional support and companionship. Valued for easing anxiety and isolation, the market is set to reach $42.5 billion by 2033, reflecting shifting social and family dynamics.

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Creative industries raise concerns over the EU AI Act

Organisations representing creative sectors have issued a joint statement expressing concerns over the current implementation of the EU AI Act, particularly its provisions for general-purpose AI systems.

The response focuses on recent documents, including the General Purpose AI Code of Practice, accompanying guidelines, and the template for training data disclosure under Article 53.

The signatories, drawn from music and broader creative industries, said they had engaged extensively throughout the consultation process. They now argue that the outcomes do not fully reflect the issues raised during those discussions.

According to the statement, the result does not provide the level of intellectual property protection that some had expected from the regulation.

The group has called on the European Commission to reconsider the implementation package and is encouraging the European Parliament and member states to review the process.

The original EU AI Act was widely acknowledged as a landmark regulation, with technology firms and creative industries closely watching its rollout across member countries.

Google confirmed that it will sign the General Purpose Code of Practice elsewhere. The company said the latest version supports Europe’s broader innovation goals more effectively than earlier drafts, but it also noted ongoing concerns.

These include the potential impact of specific requirements on competitiveness and handling trade secrets.

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AI breaches push data leak costs to new heights despite global decline

IBM’s 2025 Cost of a Data Breach Report revealed a sharp gap between rapid AI adoption and the oversight needed to secure it.

Although the global average data breach cost fell slightly to $4.44 million, security incidents involving AI systems remain more severe and disruptive.

Around 13% of organisations reported breaches involving AI models or applications, while 8% were unsure whether they had been compromised.

Alarmingly, nearly all AI-related breaches occurred without access controls, leading to data leaks in 60% of cases and operational disruption in almost one-third. Shadow AI (unsanctioned or unmanaged systems) played a central role, with one in five breaches traced back to it.

Organisations without AI governance policies or detection systems faced significantly higher costs, especially when personally identifiable information or intellectual property was exposed.

Attackers increasingly used AI tools such as deepfakes and phishing, with 16% of studied breaches involving AI-assisted threats.

Healthcare remained the costliest sector, with an average breach price of $7.42 million and the most extended recovery timeline of 279 days.

Despite the risks, fewer organisations plan to invest in post-breach security. Only 49% intend to strengthen defences, down from 63% last year.

Even fewer will prioritise AI-driven security tools. With many organisations also passing costs on to consumers, recovery now often includes long-term financial and reputational fallout, not just restoring systems.

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China says the US used a Microsoft server vulnerability to launch cyberattacks

China has accused the US of exploiting long-known vulnerabilities in Microsoft Exchange servers to launch cyberattacks on its defence sector, escalating tensions in the ongoing digital arms race between the two superpowers.

In a statement released on Friday, the Cyber Security Association of China claimed that US hackers compromised servers belonging to a significant Chinese military contractor, allegedly maintaining access for nearly a year.

The group did not disclose the name of the affected company.

The accusation is a sharp counterpunch to long-standing US claims that Beijing has orchestrated repeated cyber intrusions using the same Microsoft software. In 2021, Microsoft attributed a wide-scale hack affecting tens of thousands of Exchange servers to Chinese threat actors.

Two years later, another incident compromised the email accounts of senior US officials, prompting a federal review that criticised Microsoft for what it called a ‘cascade of security failures.’

Microsoft, based in Redmond, Washington, has recently disclosed additional intrusions by China-backed groups, including attacks exploiting flaws in its SharePoint platform.

Jon Clay of Trend Micro commented on the tit-for-tat cyber blame game: ‘Every nation carries out offensive cybersecurity operations. Given the latest SharePoint disclosure, this may be China’s way of retaliating publicly.’

Cybersecurity researchers note that Beijing has recently increased its use of public attribution as a geopolitical tactic. Ben Read of Wiz.io pointed out that China now uses cyber accusations to pressure Taiwan and shape global narratives around cybersecurity.

In April, China accused US National Security Agency (NSA) employees of hacking into the Asian Winter Games in Harbin, targeting personal data of athletes and organisers.

While the US frequently names alleged Chinese hackers and pursues legal action against them, China has historically avoided levelling public allegations against American intelligence agencies, until now.

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Concerns grow over children’s use of AI chatbots

The growing use of AI chatbots and companions among children has raised safety concerns, with experts warning of inadequate protections and potential emotional risks.

Often not designed for young users, these apps lack sufficient age verification and moderation features, making them vulnerable spaces for children. The eSafety Commissioner noted that many children are spending hours daily with AI companions, sometimes discussing topics like mental health and sex.

Studies in Australia and the UK show high engagement, with many young users viewing the chatbots as real friends and sources of emotional advice.

Experts, including Professor Tama Leaver, warn that these systems are manipulative by design, built to keep users engaged without guaranteeing appropriate or truthful responses.

Despite the concerns, initiatives like Day of AI Australia promote digital literacy to help young people understand and navigate such technologies critically.

Organisations like UNICEF say AI could offer significant educational benefits if applied safely. However, they stress that Australia must take childhood digital safety more seriously as AI rapidly reshapes how young people interact, learn and socialise.

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Zuckerberg says future AI glasses will give wearers a cognitive edge

Mark Zuckerberg framed smart glasses as the future of human–AI interaction during Meta’s Q2 2025 earnings call, saying anyone without such a device may be at a cognitive disadvantage compared to those using them.

He described the eyewear as the ideal way for AI to observe users visually and aurally, and to communicate information seamlessly during daily life.

Company leaders view smart eyewear such as Ray‑Ban Meta and Oakley Meta as early steps toward this vision, noting sales have more than tripled year-over-year.

Reality Labs, Meta’s AR/AI hardware unit, has accumulated nearly $70 billion in losses but continues investing in the form factor. Zuckerberg likened AI glasses to contact lenses for cognition, which is essential rather than optional.

While Meta remains committed to wearable AI, critics flag privacy and social risks around persistent camera-equipped glasses.

The strategy reflects a bet that wearable tech will reshape daily computing and usher in what Zuckerberg calls ‘personal superintelligence’.

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