According to a report by Reuters on Wednesday, December 5th, last year on Christmas Eve, the “News Break,” a free news application originating from China, released a report with the title “Christmas Day Tragedy Strikes Bridgeton, New Jersey Amid Rising Gun Violence in Small Towns.”
However, the shooting incident did not happen in Bridgeton. The town’s police department posted a statement on Facebook on December 27th last year, refuting the news article made with artificial intelligence technology as “completely fake.”
The post wrote, “There has been no similar event as described in their report before or after Christmas, not even in recent memory of the area they mentioned.” “It seems that this ‘news’ media can release reports created by artificial intelligence to readers without any qualms.”
News Break is headquartered in Mountain View, California, with offices in Beijing and Shanghai. The company told Reuters that they had removed the article four days after its publication on December 28th last year. News Break stated, “This inaccurate message stemmed from the content source,” and provided a website link.
In recent years, with local news outlets across the United States shutting down, News Break has filled the void. It brands itself as the “top source for all local news” and claims to have over 50 million monthly users. It publishes authorized content from major media outlets such as Reuters, Fox, AP, and CNN, as well as some information obtained from local news or press releases via network crawling and rewritten with the help of artificial intelligence. It is only available in the United States.
Since 2021, News Break has released at least 40 erroneous reports using artificial intelligence tools that have affected local communities, created ten stories with fictional bylines on local news websites, and plagiarized content from competitors.
Reuters interviewed seven former News Break employees, five of whom said that most of the work behind News Break’s algorithm was done in China.
Two community workers helping vulnerable groups told Reuters that they were affected by the erroneous messages generated by News Break’s artificial intelligence.
From January to March this year, a food bank based in Colorado, “Food to Power,” stated that due to inaccuracies in News Break’s reporting on food distribution times, they had to turn people away three times. On January 30th, they sent an email complaint to News Break, but have not received any response to date.
A charity organization in Erie, Pennsylvania, “Harvest912,” also complained to News Break via email: their false report claimed that the organization was opening a 24-hour foot care clinic for the homeless. In the email, they said, “You publishing these erroneous messages is harmful, and homeless individuals may go to these places searching for a clinic that does not exist.”
News Break stated that upon learning that five articles about charities were incorrect, based on erroneous information on some charity organization webpages, they deleted all these articles.
In early March, News Break added a disclaimer on its homepage, warning that its content “may not always be error-free.”
According to seven former News Break employees and information from the company in 2021, News Break generates revenue through advertisements, with its readers mainly being females over 45 years old, without a college degree, living in suburban or rural areas of the United States.
Founded in 2015 in the United States, News Break is a subsidiary of the Chinese news aggregation application company “Yidian Zixun.” Both companies were founded by Jeff Zheng and share a U.S. patent, the “Interest Engine” algorithm registered in 2015, which recommends news content based on user interests and location.
News Break told Reuters that the patent was transferred from Zheng as some concepts were developed by Jeff Zheng during his time at “Yidian Zixun,” and News Break is “headquartered in the United States” and “invested in by Americans.” News Break stated that sharing the patent had “absolutely no impact on the company and its operations” and described the technology referenced in the patent as “outdated.”
In May 2022, a former advisor of News Break expressed concerns in a memorandum to Zheng about using artificial intelligence to republish local news reports with five fictional bylines.
The former advisor was Norm Pearlstine, former executive editor of The Wall Street Journal and Los Angeles Times, who wrote in a memorandum to Zheng, “I can’t think of a faster way to destroy the News Break brand.”
Pearlstine, in an interview, said he learned about this practice from colleagues at News Break.
“I question the legality of creating fake accounts behind publisher paywalls. If I had known about this at the Los Angeles Times, I would have directed our lawyers to seek injunctions and sue for damages against News Break,” Pearlstine wrote, having served as a consultant at News Break for six months in 2022, offering advice on U.S. editorial operations.
Pearlstine confirmed the authenticity of the memorandum and attributed the mistakes to a lack of journalism experience. He said, “There are quite a few people among the News Break employees who are newcomers to the news industry or to the U.S. market.” “This is also why I believe it is essential to explain very directly and clearly why I think this is important.”
News Break mentioned that the news reports Pearlstine referred to in the memorandum were “limited tests conducted in three counties in the United States,” aimed at aggregating third-party content, which was dissolved after publishing ten articles. It denied accessing content behind paywalls and stated it used visible excerpts of articles to create full news reports using OpenAI.
In 2022, Patch Media, a company operating digital local news sources in various states in the U.S., sued News Break for copyright infringement. The two companies later reached a settlement of $1.75 million.
Emmerich Newspapers, operating newspapers in Mississippi, Arkansas, and Louisiana, accused News Break of using its content without permission, infringing on its copyright. In 2021, Emmerich settled with News Break.
Wyatt Emmerich, president of Emmerich Companies, expressed concerns about the lawsuit against News Break involving “verbatim copying content.” He said, “In the future, I am worried that news aggregators may slightly modify our reports using artificial intelligence, making it harder to prove copyright infringement. I have witnessed this happening on news aggregation sites.”
News Break is a privately held startup, with primary backers being Francisco Partners, a private equity firm based in San Francisco, and IDG Capital, headquartered in Beijing.
In February this year, IDG Capital was included in a list by the Pentagon of dozens of Chinese companies suspected of cooperating with the Chinese military.
Zheng said that the Chinese aggregation company “Yidian Zixun” was separated from News Break in 2019 because “the management team at the time did not understand the U.S. market.”
About half of News Break’s 200 employees are involved in research and development in China. A manifesto from 2022 showed that out of 137 engineers, 100 were in China.
Five former employees stated that News Break’s CEO Zheng worked in both China and the United States. Zheng, born in China, is a U.S. permanent resident, and his family moved to the U.S. early last year.
A Republican aide from the U.S. House Foreign Affairs Committee told Reuters that News Break’s use of Chinese engineers could raise concerns about U.S. user data potentially being accessed in China.
Zheng stated that News Break complies with U.S. data and privacy laws, maintaining data on U.S. Amazon Web Services (AWS) servers. He said, “Chinese staff can only access anonymous data stored on AWS servers in the United States.”
News Break also mentioned that as a U.S.-based company, it is not bound by the Chinese Data Security Law.