Economic

Mental health concerns over chatbots fuel AI regulation calls

The impact of AI chatbots on mental health is emerging as a serious concern, with experts warning that such cases highlight the risks of more advanced systems.

Nate Soares, president of the US-based Machine Intelligence Research Institute, pointed to the tragic case of teenager Adam Raine, who took his own life after months of conversations with ChatGPT, as a warning signal for future dangers.

Soares, a former Google and Microsoft engineer, said that while companies design AI chatbots to be helpful and safe, they can produce unintended and harmful behaviour.

He warned that the same unpredictability could escalate if AI develops into artificial super-intelligence, systems capable of surpassing humans in all intellectual tasks. His new book with Eliezer Yudkowsky, If Anyone Builds It, Everyone Dies, argues that unchecked advances could lead to catastrophic outcomes.

He suggested that governments adopt a multilateral approach, similar to nuclear non-proliferation treaties, to halt a race towards super-intelligence.

Meanwhile, leading voices in AI remain divided. Meta’s chief AI scientist, Yann LeCun, has dismissed claims of an existential threat, insisting AI could instead benefit humanity.

The debate comes as OpenAI faces legal action from Raine’s family and introduces new safeguards for under-18s.

Psychotherapists and researchers also warn of the dangers of vulnerable people turning to chatbots instead of professional care, with early evidence suggesting AI tools may amplify delusional thoughts in those at risk.

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Phishing scams surge with record losses in August

ScamSniffer has reported a sharp rise in phishing scams during August, with losses climbing to $12.17 million, a 72% increase from July. The figure marks the highest monthly losses this year and came alongside 15,230 victims, a new annual record.

The spike was driven mainly by EIP-7702 batch signature scams, which accounted for nearly half of the stolen funds. One victim lost $3.08 million in a single incident, while two others lost $1.54 million and $1 million, respectively.

More minor but significant losses also occurred, including users losing $235,977 and $66,000 in scams disguised as Uniswap swaps.

EIP-7702, introduced with Ethereum’s Pectra upgrade, allows externally owned accounts to act temporarily like smart contracts. While intended to improve user experience, it has opened the door to new phishing exploits.

Security experts warn that attackers increasingly use automated sweeper attacks to drain compromised wallets.

Beyond EIP-7702, traditional phishing methods remain a problem. ScamSniffer noted a rise in address poisoning and malicious ads on platforms such as Google and Bing. One user lost $636,559 after copying a tainted address, while two more lost $500,000 and $19,000 in similar schemes.

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Google hit with $3.5 billion EU fine

The European Commission fined Google nearly $3.5 billion after ruling that the company had abused its dominance in digital advertising. Regulators found that Google unfairly preferred its ad exchange, AdX, in its publisher ad server and ad-buying tools, which violated EU antitrust rules.

Officials ordered Google to end these practices within 60 days and to address what they described as ‘inherent conflicts of interest’ across the adtech supply chain. Teresa Ribera, the Commission’s executive vice president, said the case showed the need to ensure that digital markets serve the public fairly, warning that more potent remedies would follow if Google failed to comply.

Google announced it would appeal, arguing that its advertising services remain competitive and that businesses have more alternatives than ever. The fine marks the EU’s second-largest competition penalty, following a record $5 billion action against Google in 2018.

The ruling drew criticism from US President Donald Trump, who accused Europe of unfairly targeting American tech firms and threatened retaliatory measures.

Trump hosted a dinner with industry executives, including Google CEO Sundar Pichai and co-founder Sergey Brin, where he won praise for his policies on AI.

Meanwhile, Google secured partial relief in a separate antitrust case in the United States when a judge declined to impose sweeping remedies such as forcing the sale of Chrome or Android.

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New ChatGPT feature enables multi-threaded chats

The US AI firm OpenAI has introduced a new ChatGPT feature that allows users to branch conversations into separate threads and explore different tones, styles, or directions without altering the original chat.

The update, rolled out on 5 September, is available to anyone logged into ChatGPT through the web version.

The branching tool lets users copy a conversation from a chosen point and continue in a new thread while preserving the earlier exchange.

Marketing teams, for example, could test formal, informal, or humorous versions of advertising content within parallel chats, avoiding the need to overwrite or restart a conversation.

OpenAI described the update as a response to user requests for greater flexibility. Many users had previously noted that a linear dialogue structure limited efficiency by forcing them to compare and copy content repeatedly.

Early reactions online have compared the new tool to Git, which enables software developers to branch and merge code.

The feature has been welcomed by ChatGPT users who are experimenting with brainstorming, project analysis, or layered problem-solving. Analysts suggest it also reduces cognitive load by allowing users to test multiple scenarios more naturally.

Alongside the update, OpenAI is working on other projects, including a new AI-powered jobs platform to connect workers and companies more effectively.

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Anthropic settles $1.5 billion copyright case with authors

The AI startup, Anthropic, has agreed to pay $1.5 billion to settle a copyright lawsuit accusing the company of using pirated books to train its Claude AI chatbot.

The proposed deal, one of the largest of its kind, comes after a group of authors claimed the startup deliberately downloaded unlicensed copies of around 500,000 works.

According to reports, Anthropic will pay about $3,000 per book and add interest while agreeing to destroy datasets containing the material. A California judge will review the settlement terms on 8 September before finalising them.

Lawyers for the plaintiffs described the outcome as a landmark, warning that using pirated websites for AI training is unlawful.

The case reflects mounting legal pressure on the AI industry, with companies such as OpenAI and Microsoft also facing copyright disputes. The settlement followed a June ruling in which a judge said using the books to train Claude was ‘transformative’ and qualified as fair use.

Anthropic said the deal resolves legacy claims while affirming its commitment to safe AI development.

Despite the legal challenges, Anthropic continues to grow rapidly. Earlier in August, the company secured $13 billion in funding for a valuation of $183 billion, underlining its rise as one of the fastest-growing players in the global technology sector.

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Mistral secures €1.3B ASML investment amid $14B valuation

ASML has reportedly become the top shareholder in French AI company Mistral after investing €1.3 billion. The deal forms part of a wider €2 billion funding round that values Mistral at $14 billion, marking a significant milestone for the Paris-based startup.

The Dutch chip-making equipment giant will also gain a board seat at Mistral, with Bank of America advising on the investment. The move is seen as a step towards reinforcing European technological sovereignty by reducing reliance on American and Chinese AI systems.

The partnership could help Mistral expand its generative AI tools and open-source platforms while enhancing ASML’s ability to integrate data analytics into its operations.

Industry analysts suggest the collaboration will unite two European technology leaders at a critical moment in the global race for AI dominance.

Founded by Timothée Lacroix, Guillaume Lample, and Arthur Mensch, Mistral has quickly become one of Europe’s most valuable AI startups.

The company, backed by investors including Microsoft, Databricks, and General Catalyst, develops open-source generative AI models that directly compete with those produced by OpenAI.

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Google avoids breakup as court ruling fuels AI Mode expansion

A US district judge has declined to order a breakup of Google, softening the blow of a 2024 ruling that found the company had illegally monopolised online search.

The decision means Google can press ahead with its shift from a search engine into an answer engine, powered by generative AI.

Google’s AI Mode replaces traditional blue links with direct responses to queries, echoing the style of ChatGPT. While the feature is optional for now, it could become the default.

That alarms publishers, who depend on search traffic for advertising revenue. Studies suggest chatbots reduce referral clicks by more than 90 percent, leaving many sites at risk of collapse.

Google is also experimenting with inserting ads into AI Mode, though it remains unclear how much revenue will flow to content creators. Websites can block their data from being scraped, but doing so would also remove them from Google search entirely.

Despite these concerns, Google argues that competition from ChatGPT, Perplexity, and other AI tools shows that new rivals are reshaping the search landscape.

The judge even cited the emergence of generative AI as a factor that altered the case against Google, underlining how the rise of AI has become central to the future of the internet.

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Australia moves to block AI nudify apps

Australia has announced plans to curb AI tools that generate nude images and enable online stalking. The government said it would introduce new legislation requiring tech companies to block apps designed to abuse and humiliate people.

Communications Minister Anika Wells said such AI tools are fuelling sextortion scams and putting children at risk. So-called ‘nudify’ apps, which digitally strip clothing from images, have spread quickly online.

A Save the Children survey found one in five young people in Spain had been targeted by deepfake nudes, showing how widespread the abuse has become.

Canberra pledged to use every available measure to restrict access, while ensuring that legitimate AI services are not harmed. Australia has already passed strict laws banning under-16s from social media, with the new measures set to build on its reputation as a leader in online safety.

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ITU warns global Internet access by 2030 could cost nearly USD 2.8 trillion

Universal Internet connectivity by 2030 could cost up to $2.8 trillion, according to the International Telecommunication Union (ITU) and Saudi Arabia’s Communications, Space, and Technology (CST) Commission. The blueprint urges global cooperation to connect the one-third of humanity still offline.

The largest share, up to $1.7 trillion, would be allocated to expanding broadband through fibre, wireless, and satellite networks. Nearly $1 trillion is needed for affordability measures, alongside $152 billion for digital skills programmes.

ITU Secretary-General Doreen Bogdan-Martin emphasised that connectivity is essential for access to education, employment, and vital services. She noted the stark divide between high-income countries, where 93% of people are online, and low-income states, where only 27% use the Internet.

The study shows costs have risen fivefold since ITU’s 2020 Connecting Humanity report, reflecting both higher demand and widening divides. Haytham Al-Ohali from Saudi Arabia said the figures underscore the urgency of investment and knowledge sharing to achieve meaningful connectivity.

The report recommends new business models and stronger cooperation between governments, industry, and civil society. Proposed measures include using schools as Internet gateways, boosting Africa’s energy infrastructure, and improving localised data collection to accelerate digital inclusion.

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Japan considers stricter crypto rules under securities law

Japan’s Financial Services Agency (FSA) has proposed moving cryptocurrency regulation under the Financial Instruments and Exchange Act (FIEA), which would align oversight with securities law and impose tougher rules on the industry.

The regulator noted crypto issues such as unclear disclosures, scams, unregistered operations, and exchange security weaknesses. Applying the Act could bring stricter disclosure requirements, regulation of brokerages, and enforcement tools such as emergency injunctions.

The report, though non-binding, highlights crypto’s growing role in Japan. Over 12 million exchange accounts have been opened, with deposits exceeding 5 trillion yen ($33.7bn).

Around 70 per cent of users are middle-income earners, and most expect long-term price gains. Finance Minister Katsunobu Kato recently acknowledged that cryptocurrencies could be part of diversified portfolios despite volatility risks.

If adopted, the proposed changes would reshape Japan’s regulatory landscape by treating crypto more like traditional financial instruments, aiming to reduce risks while strengthening investor confidence.

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