| The daily disasters, glitches, and money pits of the AI boom. |
| MONDAY, OCTOBER 19, 2026 |
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| DAMAGE REPORT |
| How millions get wasted by AI. |
| $15.8M+ | in FTC refunds to Cleo AI users promised “instant” cash |
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| $3.5T+ | in AI data center writedowns Gartner sees by 2030 |
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| $38,877.59 | in fees one lawyer owes after citing 13 fake cases |
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| 2,202 | court cases with AI-invented law, as of this morning |
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| TODAY'S DISASTER |
| Musk Promised Robotaxis for Half of America. Texas Counts 739 Cars. |
| How many times has a salesman told you “by the end of the year”? I stopped counting long ago. |
| On July 23, 2025, Elon Musk made a promise on Tesla’s earnings call. He said Tesla would have self-driving ride-hailing for “half the population of the U.S. by the end of the year.” |
| Let me show you the receipt. As of October 10, Texas had 739 self-driving Teslas registered with the DMV… 420 Model Ys and 319 Cybercabs. In Austin, RobotaxiTracker counts 277 in service. |
| And the money? In April, Musk told investors the robotaxi “likely will not see material revenue until at least 2027.” |
| But the cars had troubles of their own. Tesla filed 17 crash reports with federal regulators between July 2025 and March 2026. Every one came from a Model Y in Austin… with a safety monitor on board. |
| No engineer wrote code that reads a calendar. The software drives the car… but the deadline came from a man with a microphone. |
| So who kept score? Not Tesla. Fred Lambert at Electrek read all 17 crash reports once Tesla lifted the blackouts. And Tesla reports its quarter Wednesday after the close. I’ll have a pencil ready. |
| AI CAUGHT LYING |
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| Do you check your lawyer’s homework? Damien Charlotin does. He tracks every court case where a machine made up the law… and this morning he’s at 2,202. Let me show you three… |
| Start in Manhattan. Steven A. Feldman filed papers for Affable Avenue LLC with at least 13 cases that don’t exist. He’d used vLex and Paxton AI… and never checked a single one. Judge Katherine Polk Failla struck his filings and handed his client a default judgment, so Affable Avenue lost the case because of its own lawyer. And she ordered Feldman to pay $38,877.59 of the other side’s fees on top. |
| Then New Delhi. On October 15, the Supreme Court of India found AI-made judgments in a stack of cases filed for Deepak Raheja. Justices Dipankar Datta and Augustine George Masih said the lawyer on record tried to pin all the blame on his clients. The court weighed exemplary costs… then dropped them on learning the first appellant had died. |
| And Santa Fe. In September, the New Mexico Supreme Court fined Stephen Aarons $5,000 and held him in contempt for never checking the filing. His brief in Oscar Renee Sandoval’s murder appeal quoted police testimony that ChatGPT invented… down to what the shooter wore. The court called them “wholly fabricated witnesses.” |
| AI CASH BURN |
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| CoreWeave ran up $640 million in net interest expense in one quarter. |
| Read that again. That’s April through June… and it’s more than the company’s entire net loss of $626 million. CoreWeave rents out the computing power that trains and runs AI models. And it borrowed hard to build it… $51.6 billion of debt once you count the leases. On October 14, the stock fell 15.46%. |
| And the lenders are getting nervous. Last week some CoreWeave bonds yielded more than 15%, and the cost of insuring its debt against default hit a record. Would you lend a friend money at 15% and sleep well? I wouldn’t. |
| Step back and look at the whole build, because the research firm Gartner did the math last week. Its analyst Will Sommer figures AI data centers need $8.5 trillion in cumulative revenue through 2030. But Gartner sees no more than $3.6 trillion coming in from AI services. So it warns of more than $3.5 trillion in writedowns by 2030. |
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| AI ROLLBACK TRACKER |
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| › New York City pulled its MyCity chatbot by February 4, after more than two years in beta. The Markup and THE CITY caught it telling businesses they could take a cut of workers’ tips and refuse cash, which a 2020 city law bans. Mayor Zohran Mamdani called it “functionally unusable” when he announced its end on January 30. And ABC7 put the build at nearly $600,000. |
| › The University of Westminster will retire Turnitin in July 2027, when its contract runs out. On October 9 it called the checker “largely ineffective” against the biggest cheating risk it faces today. Westminster also warned that its AI detector can flag innocent students, because it guesses rather than proves. Newcastle University will drop Turnitin after 2026-27… over plans to use student data for AI. |
| › Zillow shut down Zillow Offers on November 2, 2021. Its algorithm bought houses… and lost an average of $80,771 on every one it sold that quarter. The exit cost more than $540 million and 25% of the staff. But CEO Rich Barton admitted home prices were harder to forecast than he’d expected. |
| › Amazon scrapped its AI recruiting tool by the start of 2017. The machine learned from 10 years of résumés. And it marked down any résumé with the word “women’s” on it… as in women’s chess club captain. Reuters broke the story in October 2018, a year after the team was gone. |
| AI VIDEO SLOP |
| The week in machine-made video. Watch the hands. |
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| ► 4,480 VIEWS |
| A Colorado think tank made an AI video of a state senator keeping a shopper’s change. The Independence Institute’s clip turns Sen. Cathy Kipp into a grocery cashier to attack her Proposition NN on the November 3 ballot. The video admits it’s AI only near the end, and it carries no formal disclaimer. Kipp filed a complaint. It’s the first under Colorado’s deepfake disclosure law… and the state’s Elections Division is investigating. Denver Gazette › |
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NATIONAL TRUST
TIKTOK ADS
MADE BY TIKTOK’S AI |
| ► TIKTOK ADS, NOW PAUSED |
| TikTok’s own software made AI ads for the National Trust. The British charity says an automated TikTok feature produced them “in error,” asking people to join. A LinkedIn post flagged them. So the Trust paused every ad it runs on TikTok. Third Sector › |
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| ► X POST, OCTOBER 5 |
| An X account posted a clip of diggers uncovering Noah’s Ark on Mount Ararat. Hive’s detector scored it 99.9% likely AI… and the dig looks nothing like the Durupınar site. It’s a fake. Lead Stories called it on October 7, two days after the post went up. Lead Stories › |
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| ALSO MAKING THE ROUNDS |
| A fake airport strike spread on X and Facebook, showing a plane blowing up at Riyadh’s King Khalid International Airport. Watch the white vehicle behind the wing… it shrinks and folds flat into debris. Full Fact caught it. |
| A cloned Bill Gates warned that a billion people will die by 2027… then pitched a crypto coin. It’s called the United States Water Reserve. Gates never said it. But the footage came from an October 2025 CNBC interview where he talked about the AI bubble. Full Fact traced it. |
| Grok and Gemini told Indian users that genuine photos from this month’s protests were years old, and Gemini even named the wrong photographer. NDTV built a fact-check on Gemini’s wrong answer… then deleted the video. BOOM ran the photos down. |
| And here’s one from the top. President Trump posted a 24-second montage of animal attacks on Truth Social on October 13. Lead Stories found three of the five clips were made by AI. One was a genuine 2018 attack. |
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| AI IMAGE SLOP |
| Pictures a computer drew, and a brand paid for. |
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EPIC GAMES
FORTNITE COVER ART
GEMINI WATERMARK |
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| Fortnite shipped a song cover with Google’s Gemini watermark still in the corner. Fans spotted it on the art for “Meow” by Ironmouse and tagged her on X on October 2. Epic said the artist supplied the art… and Trap Nation, the distributor, promised a new one on every platform. Aftermath › |
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| 100 Thieves teased an Old School RuneScape shirt that a designer had edited with AI. The Prayer icon came out as a hockey mask… and the Fletching arrow had a head on both ends. Players caught it within a day. So 100 Thieves apologized on September 30 and blamed one designer in a hurry. Dexerto › |
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| A Fowler, California, council candidate put an AI-made Army portrait in his campaign video. The machine got his rank insignia, ribbons and badges wrong. Social media noticed… and the Mid Valley Times asked him about it. He denied it first. Mid Valley Times › |
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| BEST OF THE COMMENTS |
| Three people who said it better than we could. |
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| A council candidate’s AI portrait gave him the wrong Army ribbons. |
| “I know my video, but there is nothing AI in it.” |
| Patric Jones, to the Mid Valley Times on October 9. He admitted the AI on Facebook the next day. |
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| Fortnite’s cover for her song still had Google’s Gemini watermark on it. |
| “Nope i had no idea thanks for bringing it to my attention.” |
| Ironmouse, answering a fan on X on October 2, spelling and all. |
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| An AI edit turned a RuneScape prayer icon into a hockey mask. |
| “We messed up.” |
| 100 Thieves, in the first line of its apology on September 30. |
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| Found a comment worth printing? Hit reply and send me the screenshot. |
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| Let me hand today’s prize to a small-town paper in California’s Central Valley. On October 9, the Mid Valley Times asked Patric Jones about his campaign video. He said there was nothing AI in it. |
| The next day he owned up on Facebook and took responsibility for the oversight. The software drew the wrong ribbons… and Jones never caught it. But a reporter asked one plain question and printed the answer. |
| And no machine did that. Here’s what I believe: the best fact-checker in America is a person who asks “Did you use AI?”… and then waits. Try it this week. |
| Keep a hand near the switch. |
| Gus Lehman |
| EDITOR, ARTIFICIAL INCOMPETENCE |
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| SOURCES: Tesla Q3 2026 deliveries release, Form 8-K (earnings Oct 21) · NPR on Tesla’s July 2025 call · The Motley Fool on Texas DMV and RobotaxiTracker counts (Oct 14) · Automotive World on Tesla’s Q1 call (Apr 30) · Electrek on Tesla’s NHTSA crash reports (May 15) · FTC, Cleo AI refunds · Fierce Network on Gartner (Oct 15) · USA Herald and Law360 on Flycatcher v. Affable Avenue (Oct 12) · Damien Charlotin, AI Hallucination Cases database (Oct 19) · LiveLaw on Raheja v. Omkara (Oct 15) · Reuters via The Star on the New Mexico sanction (Sep 11) · roic.ai and 24/7 Wall St. on CoreWeave (Oct 15 and 16) · The Markup on MyCity (Jan 30) · Times Higher Education on Turnitin (Oct 9) · CNN via ABC17 on Zillow Offers (Nov 2, 2021) · CNBC and Reuters on Amazon’s recruiting tool (Oct 10, 2018) · Denver Gazette and The Gazette on the Kipp video · Third Sector · Lead Stories · Full Fact · BOOM · Aftermath · Dexerto · Mid Valley Times · Images: YouTube (Independence Institute TV), Lead Stories, Dexerto, Mid Valley Times |
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| ARTIFICIAL INCOMPETENCE |
Sent every weekday morning.
Nothing here is investment advice. Do your own homework. |
