An AI chatbot named Ed developed by AllHere for Los Angeles public schools was shut down after the company collapsed due to the founder's fraudulent misrepresentation of revenue and customer base to investors.
Los Angeles Unified School District contracted with startup AllHere to develop Ed, an AI-powered educational chatbot designed to help half a million students access academic and mental health resources, attendance information, and test scores. The district agreed to pay up to $6 million over five years for the system. Ed was personified as a smiling animated sun and was intended to detect and respond to student emotions while providing personalized learning pathways. The chatbot was tested with students aged 14 and over before being taken offline for refinement. In June 2024, just months after the April launch, AllHere furloughed most of its staff due to financial collapse. The company's founder and CEO Joanna Smith-Griffin was subsequently arrested and charged with securities fraud, wire fraud, and aggravated identity theft for defrauding investors of nearly $10 million. Prosecutors alleged she misrepresented AllHere's revenue as $3.7 million in 2020 when it was actually $11,000, and falsely claimed contracts with major school districts including New York City. AllHere filed for Chapter 7 bankruptcy and all employees were laid off. A former engineer raised concerns about data privacy violations, alleging that student personal information was processed through overseas servers and shared with third parties in violation of the district's privacy rules.
Domain classification, causal taxonomy, severity scores, and national security assessments were LLM-classified and may contain errors.
Using AI systems to gain a personal advantage over others such as through cheating, fraud, scams, blackmail or targeted manipulation of beliefs or behavior. Examples include AI-facilitated plagiarism for research or education, impersonating a trusted or fake individual for illegitimate financial benefit, or creating humiliating or sexual imagery.
Human
Due to a decision or action made by humans
Intentional
Due to an expected outcome from pursuing a goal
Post-deployment
Occurring after the AI model has been trained and deployed