Abstract:While there has been much research into developing AI techniques for fake news detection aided by various benchmark datasets, it has often been pointed out that fake news in different geo-political regions traces different contours. In this work we uncover, through analytical arguments and empirical evidence, the existence of an important characteristic in news originating from the Global South viz., the geo-political veracity gradient. In particular, we show that Global South news about topics from Global North -- such as news from an Indian news agency on US elections -- tend to be less likely to be fake. Observing through the prism of the political economy of fake news creation, we posit that this pattern could be due to the relative lack of monetarily aligned incentives in producing fake news about a different region than the regional remit of the audience. We provide empirical evidence for this from benchmark datasets. We also empirically analyze the consequences of this effect in applying AI-based fake news detection models for fake news AI trained on one region within another regional context. We locate our work within emerging critical scholarship on geo-political biases within AI in general, particularly with AI usage in fake news identification; we hope our insight into the geo-political veracity gradient could help steer fake news AI scholarship towards positively impacting Global South societies.