Today's popular AI-driven image-generating apps can already costume a user's selfie in fantasy-world garb. But some in the field are working on using similar tech to mimic brand-name characters and worlds from popular movies and video games.

Why it matters: Whether it's "Star Wars," the Marvel universe or "The Simpsons," people have strong ties to their favorite fictional worlds and, presumably, might be willing to pay handsomely to see themselves in those environments.

The initial idea here is to let users create images a la Lensa AI, but instead of dropping a portrait into a broad category like science fiction or anime, you'd see yourself more specifically as a Muppet or a Klingon. Further down the road, these apps could evolve to let you join in the action of a movie or video game.

• Novelty filters and web-based tools provided some of this fun in the past, but generative AI could make it cheaper, easier and more widespread.

Among those aiming to make that happen is Vermillio, a Chicago-based startup. The company has been in talks with a variety of content owners and has signed at least one major deal, expected to be announced early next year.

• All content owners should be able to set-up a generative AI system based on their intellectual property as a way to engage with fans, says Vermillio CEO Dan Neely.
• "It should happen, it should be easy and you should get paid," Neely said.

The big picture: The move to bring licensed content into generative AI comes as the technology is having a major moment, with the arrival of engines like Dall-E, Stable Diffusion and ChatGPT as well as commercial services and apps like Lensa AI.

• Vermillio isn't alone in aiming to combine generative AI with the work of specific creators. Adobe has also talked about wanting to enable generative AI to build in the style of artists who choose to help a program "learn" from their works.
• Using a single set of licensed content to power an AI engine could help address some of the legal uncertainty over today's engines, many of which were trained with mountains of data scraped from the web that can include lots of copyrighted material.

Between the lines: Authentication is a key aspect of Vermillio's offering. The company says it can track the history of a piece of AI-generated content, from the engine that generated it to modifications made after its creation.

• "There needs to be some kind of technology that understands creation, where it all came from," Neely said.

Vermillio's authentication system uses a blockchain for that purpose. But other techniques could play a role, too.

• Adobe has led its own industry effort, called the Content Authenticity Initiative, which is designed to work across companies without relying on blockchain technology.

Yes, but: For content owners, opening up their fictional worlds to generative AI carries the promise of added revenue but also holds significant dangers.

• The biggest issue is the lack of control. There's "brand risk" in the possibility that a generative AI could create works that are unpleasant or even offensive.
• The unpredictability can be seen more clearly with text-based chatbots, though there have also been complaints of image generators like Lensa AI sexualizing their subjects, lightening skin, or providing other problematic results.

Meta is sharing an open-source tool that other social networks can use to help spot and track problematic images and video content, including terrorist threats and child sexual abuse material.

Why it matters: It's a challenge for a company as big as Meta to try to monitor and remove dangerous and abusive content, but doing so is even harder for the legion of smaller companies with fewer resources.

Details: The tool, known as Hasher-Matcher-Actioner, is a kit for software developers that works by creating a unique digital fingerprint (typically a string of letters and numbers) for each image or video on a platform.

• That allows companies to quickly find and take action on not just a single posting of problematic media, but also other copies of that image or video.
• It also means that companies don't have to store the image or video in question. That protects companies from the legal and ethical risks of keeping versions of problematic content on their servers.
• While Meta's tool can work with existing hash databases, such as the one run by the Global Internet Forum to Counter Terrorism, it can also be used independently, allowing a platform to build and maintain its own database of violating material.
• Other companies can use the tool to label and find any type of content, and choose what actions to take based on their own service's policy.

What they're saying: "Terrorists don't limit themselves to trying to abuse just one platform," Dina Hussein, head of counterterrorism policy at Meta, said in a statement to Axios. "We cannot fight this fight alone — and we know the more companies work together, the safer the internet will be."

Anti-transgender campaigns resulted in the online harassment of 24 different hospitals and health care providers in 21 states over a recent four-month period, according to a report from Human Rights Campaign shared first with Axios.

The big picture: Despite being uniformly recommended by major medical organizations including the American Medical Association and the American Academy of Pediatrics, gender-affirming care has been under fire from a variety of directions, including via legislative attacks and online threats.

Driving the news: The report finds that the process of transforming online threats into real-world harm typically follows five steps.

1. A prominent account posts an inflammatory message, spreading disinformation about gender-affirming care and pointing to a specific hospital or doctor.
2. The targets start getting harassing and threatening messages online, often nearly immediately.
3. The harassment spreads offline, including threats at home, at work, or both.
4. Politicians join in the campaign, repeating false information and further spreading the messages to extreme members of their base.
5. Health care providers have to alter their practices, ranging from temporary cancellations to permanent halts to services. Some have also removed online resources due to risk for patients and staff.

What they're saying: "As threats against the transgender community continue to rise — especially impacting Black, Brown and young transgender people — it is crucial that we look at who are the major players fueling this campaign of hatred," said Kelley Robinson, president of the Human Rights Campaign, in a statement to Axios.

• "This report confirms what we have suspected for some time: these dangerous accounts are playing a major role in causing harm to healthcare providers and patients," Robinson said, with the online campaigns leading directly to real world threats and violence.
• The AMA and other groups have called on the Justice Department to investigate threats to health care providers.

On Tap

• The U.S. House Financial Services Committee will hold its hearing on the collapse of FTX this morning, despite the absence of one scheduled testimonial (see below).

Trading Places

• Former FTX CEO Sam Bankman-Fried was arrested in the Bahamas.

ICYMI

• Twitter has disbanded its Trust and Safety Council, an outside advisory group. (Axios)
• Japanese chip startup Rapidus will rely on IBM's 2-nanometer manufacturing process to begin making chips in Japan in the second half of this decade. (Axios)
• News aggregator Flipboard is dipping its toe in the user-generated content space, with a new feature called "conversations" that lets its "magazine" curators add their own posts. (Axios)

A girl in Los Angeles wrote to the authorities asking if it was OK to keep a unicorn in her backyard. They said yes, and sent her a license.