Power to Truth: How Big Tech Is Rewriting Reality and Weakening Democracy

As AI and social platforms reshape how information is created and consumed, a deeper question emerges: what happens when engagement, not truth, drives the system? In this episode of Power to Truth, Guy Rolnik, professor at the University of Chicago Booth School of Business and founder of the Israeli financial news publication  TheMarker, joined Stanford Graduate School of Business Finance and Economics Professor Anat Admati.   Together, they examined how engagement-driven platforms and AI are eroding trust and distorting public debate.

As Rolnik described, the incident began in April 2025, as messages came in from students, colleagues, and readers who had seen ads with his likeness on Facebook and Instagram. In the ads, Rolnik was seen promoting a supposed investment group offering stock tips. The pitch was fake, part of a coordinated scam that used voice cloning and face-mapping to generate a convincing replica of Rolnik. While some recognized the deception, others fell for it.

“At first, I thought it was funny, because I assumed that people would know that this is a scam, and I thought this will go away very fast,” he said. “But then in the next 24 to 48 hours, hundreds of people reached out to me with all kinds of questions.”

The ads showed how easily credibility could be manufactured and exploited at scale. When Rolnik contacted parent company Meta to have the content removed, he described a “Kafka-esque” struggle where he was forced to navigate a complex reporting process, repeatedly submit complaints, and rely on others to flag the same content. Responses were slow or nonexistent, and at times dismissive, even as the impersonation continued to spread. The burden, he noted, was placed squarely on him and the victims, while the platform enabling the deception remained largely unaccountable.

Incredibly, he said, “one of the most powerful companies in the world is actually telling you we can't get rid of these people that are impersonating you and harming you and our users.”

For Rolnik, the incident was less about a single scam than what it revealed about the system behind it. Legal protections, limited oversight, and lack of transparency allow the companies overseeing the platforms to operate with minimal accountability, shaping public conversation while leaving people with few real options when things go wrong.

Admati wondered how this system and the platforms’ business model impacts democracy. Rolnik pointed to what he said was an epistemic crisis, one that causes a “total breakdown in the trust and the legitimacy of our knowledge institutions.”

For centuries, he explained, institutions such as science, journalism, universities, and the courts have provided the foundation for democratic life by producing and validating knowledge. That infrastructure, often taken for granted, underpins everything from policy decisions to public accountability.

Today, a handful of powerful technology companies has increasingly gained control of the information ecosystem, shaping what people see, believe, and trust. As these systems become more centralized and intertwined with political power, the integrity of the information ecosystem, and by extension, the stability of democratic governance, is increasingly at risk.

“I think this is the number one issue that should concerns anyone that is in academia, in politics, everywhere,” he said.

Rolnik argued that when private technology companies decide which tools to release or restrict, they are making consequential societal judgments without public accountability. In the absence of transparency or oversight, this concentrated, largely unregulated power allows a handful of firms to direct decisions that affect millions.

That power extends beyond access to tools and into how information itself is experienced. Platforms built to maximize engagement influence how people respond to content, favoring quick reactions over reflection and verification.

“Social media doesn't just distort what we know, it rewires the way we think,” he said. “It's a system that trains us to prefer moral outrage over truth.”

“The algorithms do not optimize for truth, they optimize for engagement and outrage. We have become a society that is full of rage.”

Rolnik pointed to a growing generational shift, where trust in traditional methods of inquiry and knowledge institutions is weakening. In its place is a more fragmented environment.  The result, he suggested, is not just confusion, but a fundamental change in how younger people understand what is real.

“They don't trust anything. We are creating an electorate that thinks that truth is just a narrative. There is no such thing as truth.”

He also warned that trust in information itself is eroding. As AI-generated answers become faster and more seamless, users increasingly treat them as authoritative, even when they are flawed. He cited a recent analysis from the New York Times of Google’s AI Overviews that found that responses were accurate approximately nine out of ten times, a figure Rolnik finds deeply concerning.

“Here we have a $4 trillion company, Google, saying 10% of our answers are going to be hallucinations, or just making stuff up, or stuff that is based on Facebook posts. So, we have one of the largest companies in the world knowingly undermining knowledge.”

For Rolnik, this level of unchecked power is fundamentally incompatible with a functioning democracy, where access to reliable information and the ability to question it are essential.

When asked what can be done, Rolnik said it’s a mistake to think that more technology is the answer.

“If we look at the history of technology, and look at the history of democracy, we know that you don’t solve those problems with more technology, you solve them with laws and regulations and rules.”

He argued that the stakes are now far higher than in past cycles. With billions of users, major platforms are amassing vast amounts of behavioral, psychological, and political data, building detailed profiles that can predict and influence individual choices.

“Any one of those tech companies knows exactly our particular taste in politics, whether we are swing voters, what matters to us, and how it can be manipulated. They have all this information.”

“We don't have this information. We don't want the government to have this kind of information.”

Without meaningful limits on data collection and use, Rolnik suggested, the imbalance of power will only deepen.  He laid out a framework, beginning with stronger consumer protections and greater accountability. Large technology platforms, he argued, should no longer be shielded from liability for the harm they cause, as they are today under Section 230 of the 1996 Communication Act. Like any other powerful industry, he said, they should be subject to legal consequences when their systems enable fraud, deception, or broader societal damage.

He also called for limits on data collection and surveillance, along with stronger rules governing how personal information is used to target and influence users.  And, drawing a parallel to banking regulation, Rolnik advocated for “know your customer” standards for digital platforms.

“You cannot walk into a bank tomorrow with five million dollars and tell them, please deposit it and then send it to this place in the Middle East. We need to have ‘know your customer’ on every tech platform. We cannot give special rights to bots.”  

Finally, Rolnik stressed the urgency of protecting children with stronger safeguards. He argued that allowing young users unfettered access to platforms designed to maximize engagement has created significant, well-documented harm.

“I think that in the future, when we look back at this period of time of 10 or 20 years, and say, we let our kids on those platforms, people will say, what were we thinking? This is crazy.”