The Rise of AI-Driven Fraud: The Growing Threat of “Pig Butchering” Scams in 2025

As the world continues to witness remarkable technological advancements thanks to artificial intelligence (AI), this progress also brings darker consequences, particularly in the areas of financial and personal security. While AI offers many benefits, it simultaneously increases the risks of fraud, necessitating urgent preparation for an increasingly complex future.

In 2024, we saw glimpses of AI’s capabilities in deepfake technology, voice cloning, and fraud operations. However, these were merely test runs by fraudsters experimenting with new tactics. Now, entering 2025, AI emerges as a double-edged sword. While it enhances our abilities, it also presents imminent risks, with AI-powered fraud operations becoming a dominant force that threatens global financial systems, banking institutions, and even the integrity of human interactions. One of the most concerning new fraud schemes is “pig butchering.”

Unprecedented Financial Threats: AI Redefines Fraud

According to a report from the Deloitte Center for Financial Services, generative AI is expected to cause losses of up to $40 billion by 2027, a significant increase from $12.3 billion in 2023, marking a compound annual growth rate of 32%. This alarming rise in losses has drawn attention from the FBI, which warned in December 2024 that criminals are exploiting AI to execute widespread fraud schemes to enhance the credibility of their scams.

Fraud as a Service: How Cybercrime is Entering a New Era

In the AI-driven fraud landscape, companies like “Haotian AI” have emerged, offering face-changing software via Telegram. The company proudly boasts a research and development team of hundreds of programmers and dozens of servers dedicated to serving criminals. The software, designed for deepfake face changes, is particularly useful for scammers aiming to make romance scams more believable.

This technological advancement has led to a sharp increase in AI and deepfake use in cybercrime across platforms like Telegram. According to an analysis by Point Predictive in 2023, there were about 47,000 messages in these crime-related channels, which surged to over 350,000 messages in 2024 — a 644% increase.

“Pig Butchering” Scams: AI Enters the World of Mass Fraud

Imagine a wall of mobile phones managing thousands of fake conversations every minute, deceiving victims from all around the world. This is not a scene from a sci-fi movie but a reality enabled by new technologies deployed to scale fraud operations like never before.

One notable example is the “Instagram Automatic Fans” program, which sends thousands of messages per minute to trap users in pig butchering scams. The messages typically begin with casual lines like “My friend recommended you. How are you?” and are sent repeatedly to lure victims into a trap.

As we move into 2025, experts predict that criminal syndicates involved in pig butchering scams will leverage AI-driven deepfakes in video calls, voice cloning, and chatbots to further amplify their operations.

What Are Pig Butchering Scams?

According to the Office of Inspector General (OIG) — an independent body within U.S. government agencies responsible for ensuring integrity and efficiency — pig butchering scams are a form of investment fraud where victims are gradually manipulated into contributing increasing amounts of money, often in the form of cryptocurrency, to what appears to be a legitimate investment, only for the scammer to disappear with the funds.

How Are Consumers Targeted?

Fraudsters typically approach victims randomly through text messages, dating apps, or social media platforms before moving to VOIP chat applications. They build trust with the victim, offering high-return investment opportunities in virtual assets like cryptocurrencies. They encourage the victim to open online investment accounts and direct them to transfer funds through bank transfers to fake companies or legitimate Virtual Asset Service Providers (VASPs) or cryptocurrency exchanges.

They exert pressure on the victim to invest larger sums, threatening to end the relationship if they don’t comply. If the fraud succeeds, the victim ends up losing their money. When attempting to withdraw funds, the fraudulent platforms may demand additional fees or completely block the victim’s account, with no response from the scammers. Ultimately, the fraudsters disappear, taking all the victim’s money with them.

Conclusion

The rise of AI-driven fraud, particularly in the form of pig butchering scams, is set to redefine how cybercrime operates in the coming years. As this threat continues to evolve, both individuals and businesses need to be vigilant and proactive in safeguarding their financial information and online identities.

Sources:

• Deloitte Center for Financial Services
• Point Predictive
• FBI Reports
• Office of Inspector General (OIG)