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Why Booz Allen’s CTO used generative AI to make a deepfake video of himself

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To ensure Booz Allen Hamilton’s global workforce of more than 35,000 can guard against deepfakes and avoid potential financial fraud, the consulting firm’s chief technology officer, Bill Vass, embraced an unconventional approach.

He created a deepfake video of himself.

This week, Vass will promote a 30-second deepfake video where “he” briefly speaks to the camera to show Booz Allen employees and other workers how easy it is to create fake audio and video content. Vass contends that generative AI technology has gotten so advanced that a popular refrain, “believe none of what you hear and half of what you see,” isn’t cynical enough.

“You’re at a point with AI and these deepfakes where you are not going to be able to believe any video you see or audio you hear,” Vass says. The deepfake video of Vass will be promoted internally at Booz Allen so that employees “better understand the capabilities and how strong a deepfake can be,” he adds.

Booz Allen has previously trained workers to spot deepfakes by showing videos of celebrities, who tend to be easy targets given the vast prominence of their likeness in the public domain. But there are also hours upon hours of video and audio of Vass uploaded to YouTube, and it only takes a couple of minutes of content for criminals to make a deepfake that can trick workers.

The stunt deepfake video of Vass was created by Booz Allen in partnership with Reality Defender, a deepfake detection company that sells tools to identify AI-generated content within seconds to clients including IBM, Visa, and Comcast. Last year, Reality Defender expanded its Series A funding round, raising $33 million in total capital (from investors including Booz Allen’s venture capital arm) to further develop the startup’s technologies.

Vendors like Reality Defender are betting that processes for authenticating audio and video interactions will become as essential as other cybersecurity tactics like multi-factor authentication, a two-step verification process, and zero-trust authentication, which requires continuous verification of identity.

Alex Lisle, who became CTO at Reality Defender last week, says there is a growing list of risks CEOs and other C-suite executives must confront when it comes to deepfakes. While much of the attention is on social engineering cyberattacks that prey on workers, cybercriminals can also use AI to craft audio files where a CFO “announces” manipulated earnings results, which could move the stock. AI videos can be generated that depict a CEO issuing a fake public statement that could hurt a brand’s reputation.

“Unlike other emerging cybercriminal threats, which require an incredible amount of technical knowledge and foresight, this doesn’t,” Lisle says. Deepfakes, he adds, can be done with “off-the-shelf software and a basic knowledge of technology.”

Top executives at WPP, Accenture, and Ferrari have been targeted by deepfakes, though in the corporate world, the banking sector is a favored target. Half of finance professionals in the U.S. and U.K. have reported that they’ve experienced an attempted deepfake scanning attack. Accounting giant Deloitte has estimated that generative AI-enabled fraud losses could reach $40 billion by 2027, a compound annual growth rate of 32% from 2023’s level.

The cautionary tale that security executives frequently cite is a Hong Kong incident where a financial worker was fooled into paying $25 million to fraudsters that used a deepfake video call to impersonate the company’s chief financial officer. To avoid these types of scams, chief information security officers and other technologists have been investing in defensive systems and better employee training to detect attacks.

Vass, who joined Booz Allen in 2024 after previously serving as VP of engineering at Amazon Web Services, says social engineering attacks would even trip up employees at the Pentagon, where he worked as a senior executive in the office of the CIO in the late 1990s. The Department of Defense would hire external parties to attempt attacks, and Vass says it always amazed him how many times those teams would succeed, even after all of the training.

He recalls another incident at a startup he led, where a former employee sent a deepfake email that was purportedly sent from Vass, while also pretending to loop in the CFO. The note was sent to the procurement office, and a worker ended up processing a fake $25,000 invoice payment.

Generative AI, Vass adds, will only make cases like these all that more common. “People are going to have to learn to change their psyche to be more skeptical.”

John Kell

Send thoughts or suggestions to CIO Intelligence here.

NEWS PACKETS

Samsung, Tesla ink $16.5 billion AI chips deal. Samsung has agreed to make AI chips for electric vehicle manufacturer Tesla under a multiyear deal that is billed as a major win for the South Korean electronics giant’s U.S. foundry business. Tesla CEO Elon Musk confirmed on his social media platform X that Samsung’s new Texas semiconductor plant would be dedicated to making the auto company’s next-generation AI6 chip, which is expected to be used in humanoid robots, self-driving cars, and AI data centers, reports WSJ. The win is huge for Samsung, which has lost ground in chip manufacturing, most notably to Taiwan Semiconductor Manufacturing Co., which holds roughly two-thirds of the global foundry market and reportedly still can’t meet all demand. Samsung’s investors cheered the news, adding billions to the company’s market value.

Anthropic in talks to more than double valuation to over $170 billion. Anthropic is in talks with numerous investors about raising as much as $5 billion in a funding round that would value the four-year-old AI developer at $170 billion, according to the Financial Times. Fortune, meanwhile, separately reports this week on a class-action lawsuit against Anthropic that could expose the AI company to billions in copyright damages for allegedly using pirated books to train its models. Anthropic didn’t immediately respond to Fortune’s request for comment.

Walmart is “all in” on AI agents. Retail behemoth Walmart last week rolled out the company’s vision for how AI agents will overhaul the way customers shop, the ways that corporate and store employees work, and how vendors sell and track their merchandise performance within the Walmart ecosystem. This range of four AI agents, displayed at a media event attended by Fortune, included a generative AI digital assistant named Sparky that can answer product questions for customers. There were also some internal agentic use cases that can accomplish mundane and repetitive tasks, which is where much of the focus on AI agents has been since companies started to embrace the technology in earnest earlier this year. In yet another sign of Walmart’s seriousness when it comes to AI, the Wall Street Journal reports of key hires, including Daniel Danker, an executive at Instacart, who will steer global AI acceleration, product, and design.

Microsoft-OpenAI contract talks advance. Bloomberg reports this week that Microsoft is in “advanced talks” to secure an agreement that would give the tech giant ongoing access to OpenAI’s technology. The new terms, people familiar with the matter say, would give Microsoft use of OpenAI’s latest models, including if the startup achieves its goal of building a more powerful artificial general intelligence (AGI), a theoretical concept in which an AI system would have capabilities that rival those of a human. The news outlet reports that the pair have been meeting regularly and that a deal could come together within a matter of weeks. Microsoft has already invested $13.75 billion into OpenAI, and these negotiations would also avoid losing access to the latter company’s technology before the end of the current deal terms, which is set to expire in 2030.

ADOPTION CURVE

Majority of business leaders believe agentic AI can manage entire business divisions. EY’s latest U.S. AI Pulse survey, released this week, found that 73% of the 500 U.S.-based decision-makers say they believe agentic AI, which can act autonomously and perform complex tasks with little-to-no human supervision, will “manage entire business units.” But the business community is still quite a bit away from making that level of automation a reality. The consulting firm also reports that 34% of senior leaders say their companies have already started to implement agentic AI technology, though it is only fully implemented at 14% of those organizations.

Dan Diasio, EY’s global consulting AI leader, tells Fortune that the firm’s clients are quite bullish on agentic AI’s potential, but that most still keep a human in the loop to monitor tasks. “The parts of transforming and changing the way the business operates around the technology—creating new jobs, creating new controls that can ensure the technology works responsibly—are still lagging the implementation,” Diasio says.

A big hurdle to overcome remains human change management. Sixty-four percent of senior leaders agreed that the fear of replacement, as opposed to augmentation with agentic AI, will stifle adoption. Yet only 24% said that employee resistance is one of the biggest barriers, as cybersecurity and data privacy concerns each ranked higher, at 35% and 30%, respectively.

Courtesy of EY

JOBS RADAR

Hiring:

– Northwestern Mutual is seeking a VP, chief information security officer, based in Milwaukee. Posted salary range: $308K-$572K/year.

– The Minneapolis Star Tribune is seeking a chief product and technology officer, based in Minneapolis. Posted salary: $300K/year.

– Northeast Arc is seeking a chief information and technology officer, based in Danvers, Mass. Posted salary range: $155K-$175K/year.

– Nebraska Department of Health and Human Services is seeking a CIO, based in Lincoln, Neb. Posted salary range: $150K-$200K/year.

Hired:

– Norwegian Cruise Line appointed Daniel Henry to serve as EVP and chief digital and technology officer, where he will navigate the integration of the travel company’s IT and digital experience teams. Previously, he served as EVP and global CIO for fast-food giant McDonald’s and spent 17 years in various technology leadership roles at American Airlines, including as a VP of customer technology.

– Fulton Bank named Kevin Gremer as chief operations and technology officer, joining the Mid-Atlantic regional bank to oversee the IT and operations teams. Since 2022, he has served as SVP and head of operations of banking and investment services at City National Bank, a subsidiary of Canadian bank RBC. He also has more than 20 years of management experience at Capital One.

– CIQ announced the appointment of Peter Nelson as CTO, joining the software infrastructure firm after most recently serving as VP of engineering at Apple’s Claris software development subsidiary. Before that, he served as the chief product officer at headphones and speakers manufacturer Bowers & Wilkins.

– Everon appointed Ibrahim Kassem as CTO, where he will oversee the development of the company’s commercial security, fire, and sprinkler safety systems. Previously, Kassem served as CIO at security company Stealth Monitoring, as SVP of IT at home and business security systems provider ADT, and as VP of IT at Protection 1 Security Solutions, which merged with ADT in 2016.

– Candescent named Satheesh Ravala as CTO, joining the digital banking services provider after most recently serving as CTO at corporate-governance software company Diligent. He previously held senior leadership roles at financial services company Intercontinental Exchange (ICE) Mortgage Technology and mortgage software provider Ellie Mae.

– Arch Insurance promoted David Maher to the role of CIO, effective immediately. In this role, Maher will lead the delivery of the global insurance company’s IT strategy and infrastructure. He joined Arch in 2024 as international head of delivery. Previously, he served as a head of engineering at Lloyds Banking Group and also held technology leadership roles at banking giants including Bank of America and Merrill Lynch.

– InspereX appointed Ira Lehrman as CTO, where he will spearhead the financial technology company’s product roadmap. Lehrman joins InspereX from digital capital marketplace Clear Bid Global Markets, where he served as CTO. Previously, he held senior positions at fintech company Broadridge, investment manager Nuveen, and Merrill Lynch.



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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8 hours ago

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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8 hours ago

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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9 hours ago

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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