AI-generated misinformation campaign against Xiaomi leads to 14 arrests in Xi'an
Xi'an police arrested 14 people across three MCN (Multi-Channel Network) institutions that allegedly used AI tools to generate and distribute false claims about Xiaomi across 1,357 social media accounts. The operation targeted a scheme that used AI to batch-create misinformation and distribute it to earn platform traffic revenue, with the aim of damaging Xiaomi's reputation and business operations.
What happened
In April 2026, Xi'an police received a report from Xiaomi that a social media account had published false claims about the company's operational data, causing widespread attention and significant negative impact. Police identified that the account was operated by an MCN (Multi-Channel Network) institution that controlled 1,357 self-media accounts used to generate and distribute false video content.
The MCN institutions used AI tools to extract trending topics and generate false video posts, which were then randomly matched and batch-distributed across different social media platforms without verification, to obtain platform traffic fees. Personnel connected to the primary MCN institution also controlled two other MCN institutions, with account sources suspected of illegal trading.
Reported impact
The false content caused significant negative impact to Xiaomi's brand reputation and market operations. In a separate development, Xiaomi's legal department reported in May that as of that date, 21,983 people had participated in a damage information collection initiative since September 2025, with 3,201 providing evidence. The company had assisted 73 car owners in successfully filing lawsuits, and obtained five first-instance victory judgments where courts ordered defendants to cease infringement and delete false statements.
Index analysis
The case reveals a new type of AI crime model where offenders use AI tools to significantly reduce the threshold and cost of creating rumors, achieving 'zero-cost' batch fabrication and distribution of false information to profit from platform traffic revenue. By operating a matrix of thousands of accounts and capturing user engagement through views, shares, comments and likes, the offenders accumulated high illegal profits from low individual returns.
Governance controls
Following a month-long investigation, Xi'an police conducted a coordinated operation against the three MCN institutions, arresting 14 people. Four main suspects were placed under criminal detention on suspicion of infringing on citizens' information. The investigation seized 29 computers, 26 mobile phones, and 340,000 yuan in funds. All accounts involved were deactivated and the case remains under further investigation.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.