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The online “funhouse mirror” distorting everyone’s reality

Tiny numbers of “toxic” accounts can have massive, outsize negative effects for all.

A small, vocal minority is distorting our view of what’s normal online. That’s the conclusion of a new paper from researchers at New York University, “Inside the funhouse mirror factory: How social media distorts perceptions of norms.” 

Online discourse is… not doing well. Platforms are fighting claims of censorship in the courts, misinformation on social media is raging, and AI slop is filling up users’ feeds. 

All of this is enough to make people question just what reality looks like. It turns out that’s kind of what is happening, according to the paper, which points to several things contributing to this reality-distortion effect. 

Just 0.1% of users were responsible for 80% of fake news. 

Research cited in the paper notes that tiny numbers of “toxic” accounts can have massive, outsize negative effects for all users. “While only 3% of active accounts are toxic, they produce 33% of all content,” the authors said. Much of the false information online can be attributed to this minority group, too, noting that just 0.1% of users were responsible for 80% of fake news

This content sparks outrage among a large number of users, and can create “false polarization” among moderate users who are less likely to wade into the viper’s nest of online discussions and share their more typical viewpoints. 

Adding to the problem, online platforms are built to amplify the most extreme voices and reactions (both positive and negative) to capture our attention and distill it into engagement. 

This doesn’t just apply to social media, but also to content like online product reviews. You usually only see the worst reviews and the best reviews, and rarely anything in the middle. 

And on platforms like Meta’s Instagram, this manifests itself in a different way: you only see the perfect moments and most flattering moments from influencers (who are probably staging them). 

Even Microsoft’s LinkedIn isn't immune to this, note the authors of the paper. You’ll likely only see the most positive professional achievements in your feed, which might give you the false impression that everyone is absolutely crushing it at work except yourself. You’re less likely to see posts about more quotidian failures and setbacks. 

The paper notes that this fun house mirror doesn’t just give people a distorted view of what’s really happening, but can cause real-world harm. Citing prior research, the authors explain that these distortions can lead to teen drug and alcohol abuse, and support for authoritarian regimes

“The internet is an attention economy, but what we pay attention to is biased based towards threatening content.”

Claire E. Robertson is a research associate at NYU and the lead author of the paper. Robertson said there are two important things that platforms can do to help correct some of these distortions: be more transparent about how their algorithms work and give users more control over the content we do see.

“The internet is an attention economy, but what we pay attention to is biased based towards threatening content — things that threaten us and our social groups,” Robertson wrote in an email to Sherwood News.

This results in an amplification of negative and threatening content, Robertson said. Robertson also explained that the kind of content people actually prefer isn’t exactly a mystery. “Allowing people to make more concrete choices about the types of content they want to see might mitigate some of these negative outcomes.”

But what can people do to correct their perceptions of what’s actually happening offline in the real world? Robertson suggests a few ways that you can correct some of the biases.

“One thing you can do is compare the types of content you see online to your offline environment. Go through the last 20 people you called or texted — these are probably people you trust. How many of them have posted their opinions online? Do you think their opinions are well represented by your Twitter feed?” Robertson said.

Another exercise that Robertson suggests is to take a look at high-quality public polling on big issues from Gallup Polling or Pew Research. Robertson said there is a real disconnect between what people actually say their values are and what is portrayed online. “Most people hold nuanced views, and a notable portion hold opposite views than we would expect.”

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OpenAI’s Altman calls Anthropic an “authoritarian company” and says its Super Bowl ad is “deceptive”

Yesterday, Anthropic announced that it intends (for now) to keep its Claude chatbot free of ads. Competitors OpenAI, xAI, Meta, and Google all have expressed plans for ads in some form for their respective AI chatbots.

Anthropic also released cheeky ads depicting scenarios where people are asking questions to a personified version of their AI chatbot, only to recoil in confusion when the response transforms into a creepy ad.

It’s pretty clear that Anthropic was poking fun at the market-leading AI chatbot, ChatGPT. The characters playing the chatbot had the pitch-perfect tone of an eager-to-please ChatGPT session.

OpenAI CEO Sam Altman tried to be a good sport, calling the ads funny, but clearly they struck a nerve, prompting a 400-word post on X in which he called the ads “deceptive,” accused Anthropic of “doublespeak,” and said it was an “authoritarian company” that was heading down a “dark path.”

Altman pushed back on the depiction of how such creepy ads could show up in chats, saying that OpenAI has pledged to never weave ads into chat conversations, knowing it users would reject that.

Previewing how the rival AI startups might battle each other in the marketplace, Altman attacked Anthropic’s focus on paid subscription, rather than generous limits for free users (which appears to be working out pretty well for Anthropic):

“Anthropic serves an expensive product to rich people. We are glad they do that and we are doing that too, but we also feel strongly that we need to bring AI to billions of people who can’t pay for subscriptions.”

Both companies are racing to launch an IPO this year, which will only raise the stakes for this billionaire beef.

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Part of the reason for Google’s huge capex plans: It has a $240 billion revenue backlog

Google reported strong earnings yesterday that beat analysts’ expectations. But the thing that caught investors’ attention was Google’s capex plans.

The company spent a whopping $91.4 billion for all of 2025 on capex, but it plans to roughly double that amount in 2026 to between $175 billion and $185 billion.

Why does it need to spend so much? It can’t keep up with demand due to constraints on its compute capacity. Cloud computing demand is surging, and Google simply can’t fulfill all of the orders it has, because it can’t build the data centers and AI infrastructure fast enough.

Alphabet CEO Sundar Pichai was asked on last night’s earnings call what keeps him up at night:

“At this moment, maybe the top question is definitely around compute capacity. All the constraints, be it power, land, supply chain constraints — how do you ramp up to meet this extraordinary demand for this moment, get our investments right for the long term, and do it all in a way that we are driving efficiencies and doing it in a world-class way?”

Demand is so extraordinary that Google has $240 billion in “remaining performance obligations” (RPO, or revenue backlog).

This swelling backlog is not unique to Google. Microsoft just reported $625 billion in RPO, though a big chunk of that was for one customer: OpenAI. After market close today, we will see what Amazon’s RPO backlog looks like. It was $200 billion last quarter.

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Nvidia reportedly won’t release a new gaming graphics chip this year, a first

For the first time in its history, Nvidia will not release a new gaming graphics card this year, according to reporting by The Information.

The move comes amid a global shortage of memory chips as AI compute demand squeezes the market. Nvidia is also reportedly slashing production of its current gaming chips.

This follows Micron’s announcement in December that it plans to exit the consumer chip business.

As chipmakers redirect production toward the more lucrative AI business and PC gaming gets more expensive, price hikes could also soon come for console gaming. On Wednesday night, Valve — which owns Steam — announced it would delay the release of its forthcoming Steam Machine console, citing rising memory costs.

“When we announced these products in November, we planned on being able to share specific pricing and launch dates by now. But the memory and storage shortages you’ve likely heard about across the industry have rapidly increased since then. The limited availability and growing prices of these critical components mean we must revisit our exact shipping schedule and pricing,” the company said.

On Tuesday, Nintendo President Shuntaro Furukawa said that memory prices could impact profitability if costs remain high long-term. Sony on Wednesday said it expects memory costs to have some impact on PS5 sales.

This follows Micron’s announcement in December that it plans to exit the consumer chip business.

As chipmakers redirect production toward the more lucrative AI business and PC gaming gets more expensive, price hikes could also soon come for console gaming. On Wednesday night, Valve — which owns Steam — announced it would delay the release of its forthcoming Steam Machine console, citing rising memory costs.

“When we announced these products in November, we planned on being able to share specific pricing and launch dates by now. But the memory and storage shortages you’ve likely heard about across the industry have rapidly increased since then. The limited availability and growing prices of these critical components mean we must revisit our exact shipping schedule and pricing,” the company said.

On Tuesday, Nintendo President Shuntaro Furukawa said that memory prices could impact profitability if costs remain high long-term. Sony on Wednesday said it expects memory costs to have some impact on PS5 sales.

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Waymo announces plans to expand to Boston and Sacramento

Today Waymo, a subsidiary of Google, announced plans to expand its autonomous ride-hailing service to Boston and Sacramento. The service is currently available to the public in six US cities, including Miami, which launched last month.

Waymo has completed 20 million fully autonomous trips and now provides about 400,000 driverless rides per week, Google CEO Sundar Pichai said on Wednesday’s earnings call. He added that Waymo will also expand to additional cities in the US, as well as to the UK and Japan.

Boston would be Waymo’s first market in New England, though regulatory hurdles remain. “Before offering fully autonomous rides to Bostonians, we’ll first need the state to legalize fully autonomous vehicles,” the company said.

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