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US prosecutors see rising threat of AI-generated child sex abuse imagery
(This Oct. 17 story has been refiled to change James Silver’s title to deputy chief in paragraph 3)
By Andrew Goudsward
WASHINGTON (Reuters) – U.S. federal prosecutors are stepping up their pursuit of suspects who use artificial intelligence tools to manipulate or create child sex abuse images, as law enforcement fears the technology could spur a flood of illicit material.
The U.S. Justice Department has brought two criminal cases this year against defendants accused of using generative AI systems, which create text or images in response to user prompts, to produce explicit images of children.
“There’s more to come,” said James Silver, the deputy chief of the Justice Department’s Computer Crime and Intellectual Property Section, predicting further similar cases.
“What we’re concerned about is the normalization of this,” Silver said in an interview. “AI makes it easier to generate these kinds of images, and the more that are out there, the more normalized this becomes. That’s something that we really want to stymie and get in front of.”
The rise of generative AI has sparked concerns at the Justice Department that the rapidly advancing technology will be used to carry out cyberattacks, boost the sophistication of cryptocurrency scammers and undermine election security.
Child sex abuse cases mark some of the first times that prosecutors are trying to apply existing U.S. laws to alleged crimes involving AI, and even successful convictions could face appeals as courts weigh how the new technology may alter the legal landscape around child exploitation.
Prosecutors and child safety advocates say generative AI systems can allow offenders to morph and sexualize ordinary photos of children and warn that a proliferation of AI-produced material will make it harder for law enforcement to identify and locate real victims of abuse.
The National Center for Missing and Exploited Children, a nonprofit group that collects tips about online child exploitation, receives an average of about 450 reports each month related to generative AI, according to Yiota Souras, the group’s chief legal officer.
That’s a fraction of the average of 3 million monthly reports of overall online child exploitation the group received last year.
UNTESTED GROUND
Cases involving AI-generated sex abuse imagery are likely to tread new legal ground, particularly when an identifiable child is not depicted.
Silver said in those instances, prosecutors in the Justice Department’s child exploitation section can charge obscenity offenses when child pornography laws do not apply.
Prosecutors indicted Steven Anderegg, a software engineer from Wisconsin, in May on charges including transferring obscene material. Anderegg is accused of using Stable Diffusion, a popular text-to-image AI model, to generate images of young children engaged in sexually explicit conduct and sharing some of those images with a 15-year-old boy, according to court documents.
Anderegg has pleaded not guilty and is seeking to dismiss the charges by arguing that they violate his rights under the U.S. Constitution, court documents show.
He has been released from custody while awaiting trial. His attorney was not available for comment.
Stability AI, the maker of Stable Diffusion, said the case involved a version of the AI model that was released before the company took over the development of Stable Diffusion. The company said it has made investments to prevent “the misuse of AI for the production of harmful content.”
Federal prosecutors also charged a U.S. Army soldier with child pornography offenses in part for allegedly using AI chatbots to morph innocent photos of children he knew to generate violent sexual abuse imagery, court documents show.
The defendant, Seth Herrera, pleaded not guilty and has been ordered held in jail to await trial. Herrera’s lawyer did not respond to a request for comment.
Legal experts said that while sexually explicit depictions of actual children are covered under child pornography laws, the landscape around obscenity and purely AI-generated imagery is less clear.
The U.S. Supreme Court in 2002 struck down as unconstitutional a federal law that criminalized any depiction, including computer-generated imagery, appearing to show minors engaged in sexual activity.
“These prosecutions will be hard if the government is relying on the moral repulsiveness alone to carry the day,” said Jane Bambauer, a law professor at the University of Florida who studies AI and its impact on privacy and law enforcement.
Federal prosecutors have secured convictions in recent years against defendants who possessed sexually explicit images of children that also qualified as obscene under the law.
Advocates are also focusing on preventing AI systems from generating abusive material.
Two nonprofit advocacy groups, Thorn and All Tech Is Human, secured commitments in April from some of the largest players in AI including Alphabet’s (NASDAQ:) Google, Amazon.com (NASDAQ:), Facebook and Instagram parent Meta Platforms (NASDAQ:), OpenAI and Stability AI to avoid training their models on child sex abuse imagery and to monitor their platforms to prevent its creation and spread.
“I don’t want to paint this as a future problem, because it’s not. It’s happening now,” said Rebecca Portnoff, Thorn’s vice president of data science.
“As far as whether it’s a future problem that will get completely out of control, I still have hope that we can act in this window of opportunity to prevent that.”
On Monday, Keefe, Bruyette & Woods made an adjustment to the price target for MetroCity Bankshares Inc. (NASDAQ: NASDAQ:), raising it to $34 from the previous $32 while maintaining a Market Perform rating on the stock.
The firm’s decision follows MetroCity Bankshares’ consistent demonstration of leading profitability and robust capital levels across various market cycles. The bank’s forward-looking performance indicators are expected to remain strong, with a return on assets (ROA) forecast at 1.8%, return on tangible common equity (ROTCE) at 15%, and an anticipated growth from 11% in the third quarter over the next two years.
MetroCity Bankshares is currently trading at a premium compared to its peers, with a tangible book value (TBV) multiple of 1.9 times versus the 1.5 times median for small to midsize (SMID) banks. This premium reflects the bank’s favorable position and the market’s positive reception of its financial health and growth prospects.
The price target increase also takes into account a slight outperformance in the third quarter of 2024, where MetroCity Bankshares exceeded expectations by $0.01 per share. Despite this beat, the firm’s estimates for the bank’s financial performance remain largely unchanged.
The analyst from Keefe, Bruyette & Woods highlighted the bank’s strong outlook, stating, “MCBS has generated leading profitability while maintaining strong levels of capital through different parts of the cycle. We see this continuing as we look through 2026 with ROA at 1.8%, ROTCE at 15%, and building from 11% in Q3 over the next 2 years.” This view underpins the rationale for the revised price target, signaling confidence in MetroCity Bankshares’ trajectory for the coming years.
In other recent news, MetroCity Bankshares, Inc. has added a new member to its Board of Directors, Mr. John Paek. He is set to bring a vast array of experience to the board, with a professional history that includes roles at Deloitte Tax LLP and Baker McKenzie LLP. Despite his impressive qualifications, it’s been noted that Mr. Paek does not meet the independence criteria under NASDAQ’s listing rules, due to his familial connection to the company’s leadership.
Mr. Paek will join the Asset Liability Committee, the Credit Risk Management Committee, and the Directors’ Loan Committee of the Bank. As for his remuneration, he will receive the same compensation as his fellow board members, as outlined in the company’s Definitive Proxy Statement filed earlier this year.
InvestingPro Insights
Recent data from InvestingPro reinforces Keefe, Bruyette & Woods’ positive outlook on MetroCity Bankshares Inc. (NASDAQ: MCBS). The company’s P/E ratio of 12.94 and PEG ratio of 0.76 suggest that the stock may be undervalued relative to its earnings growth potential, aligning with the bank’s premium trading position noted in the article.
InvestingPro Tips highlight MCBS’s strong financial performance, including its high return over the last year and decade, which corroborates the analyst’s expectations of continued profitability. The company’s dividend growth of 27.78% and a current dividend yield of 2.9% further underscore its financial health and shareholder value creation.
The bank’s revenue growth of 11.66% over the last twelve months and an impressive 33.58% quarterly growth support the article’s projection of continued growth. Moreover, the operating income margin of 60.93% reflects the leading profitability mentioned by the analyst.
For investors seeking a deeper understanding of MCBS’s potential, InvestingPro offers 7 additional tips, providing a comprehensive analysis of the company’s financial position and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Recognition is a testament to Avangrid (NYSE:)’s commitment to sustainability and dedication to advancing the clean energy transition
ORANGE, Conn.–(BUSINESS WIRE)–Avangrid, Inc. (NYSE: AGR), a leading sustainable energy company and member of the Iberdrola (OTC:) Group, was recently named to the Newsweek list of America’s Greenest Companies 2025, which recognizes the top 500 U.S. companies for advancements in managing their sustainability footprint.
Companies were evaluated and scored on over 25 parameters across the following four categories: greenhouse gas emissions, water usage, waste generation, and sustainability data disclosure and commitments.
At Avangrid, we pride ourselves on being a leading sustainable company and I am proud to see that reflected in this latest report from Newsweek, said Pedro Azagra, Avangrid CEO. By committing to industry-leading sustainability goals, we are advancing safe and affordable clean energy strategies that help responsibly advance society and strengthen the communities we serve.
Avangrid’s overall success is dependent creating a clean energy future for all. To achieve this, the Company is investing in the reliability and resiliency of its network infrastructure, increasing its generation capacity of renewable energy, and innovating across its operations to create positive outcomes for customers, communities, and the environment.
Our focus on sustainability is core to every decision we make, said Laney Brown, Vice President of Sustainability at Avangrid. As one of the greenest companies in the country, we are dedicated to helping solve critical issues like climate change and protecting biodiversity.
Avangrid has an ambitious carbon neutrality implementation strategy that is aligned with Iberdrola’s SBTi (Science Based Target initiative) goal. Avangrid’s goal is to achieve carbon neutrality for Scope 1 and 2 emissions by 2030.
Newsweek partnered with Plant-A Insights and GIST Impact to highlight U.S. companies committed to reducing their environmental impact. The ranking is determined through a comprehensive analysis of data from both public and private companies operating in the U.S. To ensure the highest standards, only companies that meet the European Union’s stringent sustainability criteria”considered the most advanced globally”were eligible.
This recognition from Newsweek comes on the heels of several other top awards for Avangrid in 2024 related to climate change and sustainability, including being named one of America’s Climate Leaders by USA Today, Climate Change Project of the Year by the Environmental Business Council of New England, and being recognized as the top utility on the 2024 JUST 100 list published by JUST Capital and CNBC.
About Avangrid: Avangrid, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $45 billion in assets and operations in 24 U.S. states, Avangrid has two primary lines of business: networks and renewables. Through its networks business, Avangrid owns and operates eight electric and utilities, serving more than 3.3 million customers in New York and New England. Through its renewables business, Avangrid owns and operates a portfolio of renewable energy generation facilities across the United States. Avangrid employs approximately 8,000 people and has been recognized by JUST Capital as one of the JUST 100 companies “ a ranking of America’s best corporate citizens “ in 2024 for the fourth consecutive year. In 2024, Avangrid ranked first among utilities and 12 overall. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2024 for the sixth consecutive year by the Ethisphere Institute. Avangrid is a member of the group of companies controlled by Iberdrola, S.A. For more information, visit www.avangrid.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241021546555/en/
Media:
Keaton Thomas
Keaton.thomas@avangrid.com
503-956-9621
Source: AVANGRID, Inc.
DETROIT (Reuters) – Lucid (NASDAQ:) CEO Peter Rawlinson said on Monday that a stock sale announced last week will provide the electric luxury sedan maker with a “cash runway well into 2026.”
Rawlinson said in an interview on the sidelines of a Reuters Next event that the stock sale, which raised about $1.67 billion, “serves to support the future of the company long term” as it prepares to begin building its Gravity SUV in the coming months.
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