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The Illuminati feared that augmentation technology would cause society and human evolution itself to go beyond their ability to control, jeopardizing their centuries-old vision of a better human society under their management. They decided to implant in every augmented person a biochip that would allow them to limit or shut down a person's augmentations at will. The chip was designed with the aid of Sarif Industries engineers that the Illuminati kidnapped in a raid on Sarif Industries HQ in Detroit, and was manufactured and distributed by Tai Yong Medical.
The Illuminati discovered a way to provoke glitches in the existing biochips of augmented individuals by exploiting a security flaw in said chip's firmware. Using Picus broadcast satellites, the Illuminati broadcasted a signal that caused augmented people everywhere to experience harmless but inconvenient glitches. Augmented people everywhere flocked to LIMB clinics to receive the new biochip, unaware of the malware that the Illuminati had installed on it.
Unbeknownst to the Illuminati, Hugh Darrow (one of their own members), goes against their intentions and alters the biochip from its original purpose. During the inauguration of the Panchea project, Hugh Darrow broadcasts a signal that causes every augmented person carrying the new biochip to go violently insane.
When Adam Jensen confronted Darrow, Darrow claimed he had come to see his invention as a corruption of human identity, and hoped the horror of this crisis would turn humanity away from it and on to a purer path. In reality, he was bitter that he could not be augmented himself, due to a genetic fluke that meant his body couldn't tolerate even the most basic of implants. If he could not be a part of this glorious human revolution, he would destroy it.
The incident is resolved by Adam Jensen who shuts down Darrow's signal at Panchaea. Sadly, by this point the damage has been done. Millions of people around the world are dead by the hands of crazed augmented people.
- Žofie Růžička (President of the Czech Republic) - drowned in the Vltava River after her augmented bodyguard lost control and drove her limousine off into the river.
- Daniela King (wife of the Picus TV host Titus King) - killed by their augmented son Sebastian when he lost control.
- Harrison Stacker's wife and daughter - killed by him when he lost control.
- William Taggart - either killed by augmented people in Panchaea or died during Panchaea's destruction. Officially considered missing.
- Hugh Darrow - either killed by augmented people in Panchaea or died during Panchaea's destruction. Officially considered missing.
Of the over ninety million augmented people who existed before the Aug Incident, only seven million survived.
The details of what happened in Panchea remain obscure to most of humanity.
Following the millions of deaths and injuries during the Aug Incident, Darrow's wish is realized: mechanical augmentation is viewed as a threat to humanity. As a result, augmented people are segregated from the rest of society and placed in slum-like ghettos, such as Golem City, as a result of laws being introduced such as the controversial Human Restoration Act. In addition, many augmentation manufacturers, such as Sarif Industries, collapse in the wake of the disaster. Tai Yong Medical is one of the only, if not the only, surviving manufacturers powerful enough to purchase Sarif's patents and other company assets.