Lost All Money by Trusting in "Elon Musk Deepfake": A Cautionary Tale of Deepfake

Steve Beauchamp, 82, was in desperate need of money to support his family. He believed Elon Musk could help him.

Late last year, Beauchamp came across a video showing the Tesla CEO promoting an attractive, quick-return investment opportunity. He hurriedly contacted the company that posted the clip and opened an account for $248.

After a few transactions, Beauchamp decided to withdraw his entire retirement account to fund the investment. The total amount he invested reached $690,000.

Then one day, all the money vanished. Instead of being invested in the lucrative deal that "Elon Musk" had introduced, it fell straight into the hands of sophisticated scam organizations, aided by artificial intelligence.

According to the New York Times, the scammers edited a real interview with Musk, then replaced the billionaire’s voice with an AI-generated replica. The cloning technology was so sophisticated that it could alter every mouth movement to match the spoken text. For an average viewer, it was nearly impossible to detect the trick.

“To me, that video was really him. I didn’t know it was actually AI making him say that,” Beauchamp said about the video of Musk he watched.

Known as deepfakes, thousands of AI-generated videos have flooded the Internet in recent months. Many unsuspecting victims, including Beauchamp, have fallen into the trap.

According to estimates from Deloitte, AI deepfake products could facilitate billions of dollars in scams each year. These videos cost only a few dollars to produce and are then advertised on social media to reach a broader audience. The videos are eerily convincing.

“This is probably the largest deepfake scam ever,” commented Francesco Cavalli, co-founder of Sensity, a company that monitors and detects such frauds.

According to Sensity, Elon Musk is the most popular spokesperson in these scam videos. He has appeared in nearly a quarter of deepfake scams since late last year. In cryptocurrency investment videos, the billionaire features in most of them.

A person in Texas reported losing Bitcoin worth $36,000 after seeing a "fake video" of Elon Musk speaking on YouTube in February 2023, according to a report by the Better Business Bureau. “I sent the Bitcoin and received nothing in return,” the person wrote.

In reality, AI-generated videos are not flawless. In some videos, the Tesla CEO may sound robotic, and his mouth doesn’t always sync perfectly with the words. However, these videos are constantly being improved to deceive unsuspecting victims.

According to Cavalli from Sensity, these videos only cost $10 to create. The scammers, mainly based in India, Russia, China, and Eastern Europe, produce fake videos by combining free and cheap tools in less than 10 minutes.

“They are continuing to amplify their campaign, translating it into multiple languages, and continuously spreading the scam to more victims,” Cavalli said.

According to the New York Times, many scams start with fake AI-made software ads, claiming that investors can make huge profits if they trust the right people. Initially, victims only send a small amount of money—around $250—before being lured into investing more.

Scammers often target older Internet users who have some knowledge of cryptocurrency, AI, or Elon Musk, but are not familiar with safe investment methods. “The elderly are always the easiest group to scam,” noted Finn Brunton, a professor at the University of California, Davis, and an expert on cryptocurrency markets.