Three U.S. lawmakers are demanding increased scrutiny of NewsBreak, a popular U.S. news aggregation app, following a Reuters report revealing its Chinese origins and use of AI tools to produce erroneous stories.
Reuters identified at least 40 instances where NewsBreak’s AI tools negatively impacted communities, drawing on court documents related to copyright infringement and a 2022 company memo highlighting concerns about “AI-generated stories.”
“The only thing more terrifying than a company that deals in unchecked, artificially generated news, is one with deep ties to an adversarial foreign government,” said Senator Mark Warner, a Democrat and chair of the Intelligence Committee.
He emphasized the broader threat posed by technologies from countries of concern and called for a comprehensive approach to address this issue.
The lawmakers voiced concerns about NewsBreak’s connections to Chinese investors and its operations in China, where many of its engineers are based.
NewsBreak responded, asserting its American identity: “NewsBreak is a U.S. company and always has been. Any assertion to the contrary is not true,” a spokesperson said.
NewsBreak was launched in the U.S. in 2015 as a subsidiary of Yidian, a Chinese news aggregation app founded by Jeff Zheng, who is also the CEO of NewsBreak.
The two companies share a U.S. patent for an “Interest Engine” algorithm, which recommends news content based on users’ interests and location.
While Yidian received praise from Chinese Communist Party officials in 2017 for disseminating government propaganda, Reuters found no evidence that NewsBreak censored or produced pro-Chinese government news.
“This report brings to light serious questions about Newsbreak, its historical relationship with an entity that assisted the CCP, and to Chinese state-linked media,” said Representative Raja Krishnamoorthi, referencing Yidian and its former investor, state-linked Phoenix New Media.
He emphasized the need for transparency about any connections to the CCP, especially concerning the use of “opaque algorithms” and AI tools to produce news.
U.S. Representative Elise Stefanik, a Republican, pointed to IDG Capital’s backing of NewsBreak as a reason for increased scrutiny. “
We cannot allow our foreign adversaries access to American citizens’ data to weaponize them against America’s interests,” she said.
NewsBreak, a privately held start-up, is primarily backed by private equity firms Francisco Partners, based in San Francisco, and Beijing-based IDG Capital.
In February, IDG Capital was added to a Pentagon list of companies allegedly working with Beijing’s military, a claim IDG denies.
Francisco Partners described the Reuters story as “false and misleading,” disputing their description as a “primary backer” of NewsBreak due to their investment being less than 10%.
However, NewsBreak has maintained that Francisco Partners is its primary investor.