The Instagram post in question featured a convincingly deepfaked version of Damodaran pitching what appeared to be an “investment club,” using his face, voice, and familiar references to stocks like Nvidia and Palantir to mimic his speaking style and persona. While the visuals were realistic, Damodaran was quick to call out the post’s hollowness.
“On looks & language, I give this AI version of me an A– (with the minus for being too polished…),” Damodaran wrote on the social media platform X (formerly Twitter). “On content, the AI post is lazy.”
In a blog post dated August 5 titled The Imitation Game: Defending Against AI’s Dark Side, the finance professor noted the post lacked a coherent valuation thesis, calling it “sloppily done.” He said, “While it mentions Nvidia and Palantir, and talks about value, it does so without a valuation story or numbers. A good bot would have done much better!”
The scam’s biggest misstep, he said, was misrepresenting him as offering investment guidance. “Talk of forming an investment group (not my thing), delivering astounding returns (a fairy tale), and asking for money (again, not me…)” all clashed with his public stance on markets.
AI-Powered scams raise the stakes
Damodaran warned that AI had “upped the ante” on financial scams by mimicking not just appearance and tone, but also language patterns and stock-specific commentary drawn from his decades of open-access content. “It is clear to me that AI is now going to change this game,” he wrote, “and that I will have to think about new ways to counter its insidious reach.”
In the blog, he described a bot being developed at NYU, one he had previously signed off on, that has access to virtually every class, post, dataset, and spreadsheet he’s ever published. The potential of this bot to produce eerily accurate simulations of his work is what led Damodaran to call it a “Frankenstein monster perhaps in the making.”
‘Scams are a tango’
While Damodaran offered a detailed autopsy of the scam’s flaws, he also issued a broader warning to investors susceptible to AI-generated cons. “While you may have caught this scam, AI will only get better at scamming you,” he cautioned. “To defend yourself, you need to get past ‘looks like, sounds like,’ do your homework, screen for investment arrogance and avoid ROMO & FOMO.”
He broke down the psychology of investor vulnerability into two categories: ROMO (regret over missing out) and FOMO (fear of missing out), saying both make investors “easy prey for those who will offer you easy ways (there are none) of finding it.”
In his words, “Every scam is a tango, needing both the scammer and the scammed for the dance to work, with the former preparing the trap, and the latter walking into it, blinded by greed to the false notes.”
Open access, Open risks
Damodaran has long shared his work freely online, from spreadsheets and data sets to class videos and blog posts, and reiterated that this was driven not by altruism but practicality. “I am no Mother Theresa!” he wrote. “Much of what I know or write about is pedestrian, and holding it in secret seems silly.”
Still, that transparency has made him a ripe target for impersonation. “I cannot think of a single item of content that I have produced in the last decade that is not on one of these platforms,” he said. “Thus also accessible to any AI entity.”
Despite multiple reports of scams using his likeness, he said most have “tended to collapse under the weight of their own contradictions.” But with AI, that may no longer be the case.
The professor concluded his blog with a warning that regulators and platforms are unlikely to be effective gatekeepers in the fight against AI-generated scams. “Looking to regulators or the government for protection will do little more than offer false comfort,” he wrote. “The best defense is ‘caveat emptor’ or ‘buyer beware’.”
For Damodaran, the key lies in investor education, understanding how to question content that looks and sounds authoritative but lacks depth. “If you are a frequent reader of this blog… it is unlikely that you were fooled by the Instagram post or video,” he said. “It remains an uncomfortable truth that the people most exposed to these scams are the ones who have read little or none of what I have written.”
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)