| The daily disasters, glitches, and money pits of the AI boom. |
| WEDNESDAY, OCTOBER 21, 2026 |
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| DAMAGE REPORT |
| How millions get wasted by AI. |
| $893M | AI scam losses Americans reported to the FBI in 2025 |
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| $15M+ | the SEC says fake AI trading bots took from retail investors |
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| $1.8M | one Amazon AI job that ran 860% over budget |
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| $16.444B | SpaceX’s AI arm spent on capex in one quarter, filed this week |
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| TODAY'S DISASTER |
| OpenAI Launched Its Atlas Browser One Year Ago Today. It Was Gone by August. |
| Do you remember what you were doing a year ago today? I was watching Sam Altman try to sell me a web browser. |
| OpenAI launched ChatGPT Atlas for the Mac on October 21, 2025… and Altman called it “a rare once-a-decade opportunity to rethink what a browser can be about.” That was the pitch. And he said Windows would follow as fast as OpenAI could build it. |
| Let me show you what turned up instead. A week later, a security firm called LayerX reported its test of Atlas against 103 phishing attacks from the wild… 97 got through. That’s a failure rate over 94%. Chrome and Edge stopped about half. |
| No engineer told Atlas to let crooks in. But Atlas had no defense ready when they showed up… so in they came. |
| By December, OpenAI wrote that orders tucked inside web pages are unlikely ever to be fully solved. The Windows version never shipped. And on August 9, OpenAI switched Atlas off, 292 days after launch. |
| So who caught it? Or Eshed, the CEO of LayerX. His team ran the test and put the numbers out… more than nine months before OpenAI switched Atlas off. |
| AI CAUGHT LYING |
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| How many times has a court caught a machine making up the law? I check Damien Charlotin’s count. He’s at 2,202 as of Monday. And a Canadian tracker, CourtReady, now lists 272 decisions across 65 courts and tribunals in that country alone. Let me show you three new ones… |
| Start in Florida. On October 7, the Fourth District Court of Appeal read a brief that cited Ogilvie v. Sebring Airport Authority seven times… there’s no such case. Winsor Daniel Jr. signed the brief. So he and his clients now owe the other side’s appeal fees, and a trial court will set the amount. An earlier complaint in the same fight cited 32 cases. Fifteen didn’t exist. |
| Then Britain. On September 21, the Upper Tribunal threw out an immigration appeal filed through Sarker Solicitors. The grounds quoted cases that don’t exist… and even made up lines from the lower judge’s own ruling. The barrister counted at least 18 separate errors and dropped three of his four grounds. But two people at least owned it, and reported themselves to the Solicitors Regulation Authority. |
| And Tasmania. This time, the fake law came from the government side. The state’s parole board gagged Susan Neill-Fraser with a paper whose case law Justice Stephen Estcourt called “fictitious.” Her lawyer, Patrick Coleridge, said the cases didn’t exist. On September 15 the gag came off. The board didn’t fight it. And the state’s Justice Department is now checking how far AI fed past parole decisions. No fine yet… but Attorney-General Guy Barnett has ordered an independent investigation. |
| AI CASH BURN |
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| SpaceX’s AI arm spent $16.444 billion on capital projects in three months. |
| That’s July through September, straight from the filing SpaceX made with regulators yesterday afternoon. Over nine months, the whole company spent $48.069 billion on capex… while its operations brought in $13.097 billion in cash. I’ll be fair. The AI arm, which SpaceX calls Super Intelligence, made a $431 million operating profit this quarter. But it’s down $3.295 billion year to date. |
| Would you buy a business that spends $3.67 on capex for every dollar of cash it makes? I wouldn’t. So look wider. PwC asked 4,454 CEOs from 95 countries and territories what AI had done for their companies… and 56% said it brought no extra revenue and no lower costs. Only 12% got both. That’s one in eight. |
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| AI ROLLBACK TRACKER |
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| › Fakenham Medical Practice in Norfolk is dropping its AI receptionist this month. The practice switched on EMMA, a phone system made by QuantumLoopAI, back in April. Patients and staff complained… and chief executive Andrew Havemann admitted EMMA didn’t work as intended. So clinicians will sort every patient request themselves from now on. |
| › OpenAI killed the Sora API on September 24. The Sora app had already gone dark on April 26, after downloads fell 45% by January… and Disney called off a planned $1 billion investment. That’s two OpenAI products gone this year. |
| › Klarna started hiring people back in May 2025. A year earlier, Klarna bragged its OpenAI chatbot did the work of 700 agents. Then CEO Sebastian Siemiatkowski admitted the result was lower quality… and now Klarna promises a human to any customer who asks. |
| › Air Canada lost a fight over its own chatbot on February 14, 2024. The bot got the bereavement fare rules wrong… then Air Canada argued the chatbot was responsible for its own actions. The tribunal disagreed. It called that “a remarkable submission,” and the airline paid $812.02. |
| AI VIDEO SLOP |
| The week in machine-made video. Watch the hands. |
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| ► 59K+ VIEWS ON FACEBOOK |
| One Nation paid for an AI-made ad in Victoria’s state election campaign. A son “comes out” as a conservative, and his mother pulls off a blue wig to show red hair. The whole cast came out of a machine… down to a fake ABC newsreader. Mumbrella broke it. Mumbrella › |
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| ► X, OCT 17 |
| An AI clip claimed to show people fishing iPhone boxes out of the sea near the Strait of Hormuz. The boxes float but never look wet. One man grabs two boxes… a second later he’s holding more. Lead Stories called it. Lead Stories › |
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| ► INSTAGRAM, OCT 12 |
| A “security camera” clip showed a huge bull shark splashing at a dock in Cape Coral, Florida. The account behind it, The Abyss Archives, left its own name in the corner of the fake camera feed. That’s a giveaway. And the shark is far bigger than the bull sharks people have filmed in those canals… Lead Stories caught it. Lead Stories › |
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| ALSO MAKING THE ROUNDS |
| An AI clip of a woman stopping a police bus spread as footage of a Delhi protest on October 10. At four seconds in, a reporter’s mic passes straight through her arm… BOOM rated it false. |
| India’s BJP marked Dussehra yesterday with an AI video that casts Samajwadi Party chief Akhilesh Yadav as the demon king Ravana. But Yadav told reporters AI should be used for the greater good. |
| Nigeria’s Finance Ministry explained a fuel discount on October 10 in a video built from AI pictures and an AI voice. It never told viewers clearly. So broadcaster Rufai Oseni went on X and called it propaganda. |
| And a “Zelenskyy belly dancing” reel came back around. The first clip put his face on Argentinian dancer Pablo Acosta… and Full Fact slowed the third clip down until the face glitched. |
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| AI IMAGE SLOP |
| Pictures a computer drew, and a brand paid for. |
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| Just Eat let AI draw menu pictures for small takeaways in the UK and Ireland. A sausage soda bread came out as a pint of cola with meat floating in it. Customers posted the worst ones… so Just Eat apologized, started pulling the pictures and paused the trial while it fixes the tool. The Independent › |
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| Disney Cruise Line hung an AI flyer for its Halloween coffees on the Disney Wish. The cups on the flyer don’t match the ones the cafe hands out, which Disney artist Caley Hicks drew with jack-o’-lanterns and Mickey pumpkins. Disney influencer Dapper Danielle caught it. WDW News Today › |
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| Celebrity Cruises sold its new Pool Club with brochure pictures a computer drew. Diners, buffet, sunshine… none of it shot on a ship. A Reddit poster shared the pages and asked why Celebrity didn’t just go photograph the ship it was selling. Fair question. The Cool Down › |
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| BEST OF THE COMMENTS |
| Three people who said it better than we could. |
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| OpenAI launched Atlas, a browser with an AI agent built in. |
| “I remain deeply skeptical of the browser agents category as a whole.” |
| Simon Willison, programmer, on his blog the day Atlas launched. His post was about browser agents in general. No like count published. |
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| Disney Cruise Line put an AI flyer on the Disney Wish. |
| “You can’t pay an intern over in your Celebration DCL offices…” |
| Dapper Danielle, Disney influencer, in an Instagram reel, via WDW News Today. No like count published. |
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| AI drew the flyer for a free kickball game. |
| “Send me a flyer written by crayon and I’d attend” |
| A commenter on Reddit’s r/mildlyinfuriating, via The Cool Down. No upvote count published. |
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| Found a comment worth printing? Hit reply and send me the screenshot. |
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| Atlas, happy birthday. I’ve got a few words for you. |
| You were going to be the browser that did the clicking for us… LayerX sent you 103 phishing pages, and you let 97 of them through. You never got to Windows. On August 9, OpenAI turned you off. |
| But I’ll give you this. You taught plenty of people to read the page before they hit enter. Here’s what I believe: a browser that clicks for you is a browser you have to watch. |
| Keep a hand near the switch. |
| Gus Lehman |
| EDITOR, ARTIFICIAL INCOMPETENCE |
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| SOURCES: Axios and OpenAI on the Atlas launch (Oct 21, 2025) · CSO Online on the LayerX test (Oct 28, 2025) · OpenAI on prompt injection (Dec 22, 2025) · MacRumors, The Next Web and ProPakistani on the Atlas shutdown (Jul 10 and 11) · FBI on AI scam losses (Apr 6) · SEC release 2026-95 (Sep 29) · The Next Web on Amazon’s overrun (Jul 30) · SpaceX Form 8-K, Q3 2026 (Oct 20) · PwC 29th Global CEO Survey · Damien Charlotin, AI Hallucination Cases database (Oct 19) · CourtReady (Oct 19) · Kid International v. City National Bank, Florida 4th DCA (Oct 7) · NK (Namibia) v SSHD, Upper Tribunal (Sep 21) · ABC News and The Canberra Times on the Tasmanian parole board (Sep 15 and 19) · Resultsense and the Fakenham and Wells Times on EMMA (Sep 23) · OpenAI Help Center and Axios on Sora · Fortune on Klarna (May 9, 2025) · Moffatt v. Air Canada, 2024 BCCRT 149 · Mumbrella · Lead Stories · BOOM · ANI · Parallel Facts · Full Fact · The Independent via AOL · WDW News Today · The Cool Down · Simon Willison’s blog · Images: YouTube (One Nation Party), Lead Stories, Lead Stories, Just Eat via The Independent, Dapper Danielle via WDW News Today, Reddit via The Cool Down |
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| ARTIFICIAL INCOMPETENCE |
Sent every weekday morning.
Nothing here is investment advice. Do your own homework. |
