Why AI-driven authentication is the unavoidable ‘Tax’ on businesses

Generative AI has armed cybermcriminals with a tool that doesnot just steal content, but sanitises it. For businesses, this forces a new, expensive mandate; the “Authenticity Tax”.

The digital economy is facing a crisis of provenance, the recorded history of ownership and origin. Where cybercrime once focused on stealing simple data and money, has now matured into an automated, high-volume threat to intellectual property (IP) and verifiable truth. And, here GenAI is being utilised to enable two transformative criminal acts:

• Digital washing
• Industrialisation of forgery
• The anatomy of AI-washing

The problem has moved beyond digital piracy, where a file is copied and an identical signature is retained. It is an act of digital money laundering, where the original copyright signature is scrubbed and a new, AI-generated patina is applied.

How AI-washing works:

1. Ingestion: Stolen content, a proprietary code library, a unique piece of concept art, or a proprietary data set is fed into a sophisticated Generative AI model, often a repurposed large language model or a diffusion model.

2. Latent transformation: The model is then prompted to subtly alter the input. For code, this might mean variable renaming, structural refactoring, or language translation (e.g. Python to JavaScript). For images, it means shifting the stylistic elements, colors, and textures.

3. Signature eradication: This transformation takes place in the model’s latent space, a space where concepts are represented. By passing through this space, the output is ‘new’ enough that its digital fingerprint is completely different, rendering traditional, digital forensics useless.

4. Commercialisation: The washed content is then sold on black markets, integrated into infringing commercial products, or used to build competing services, leaving the original creator with no easy technical mechanism to prove the theft.

The costly burden of proof

In terms to fight this industrialisation of forgery, legitimate creators have been forced into an expensive new arm race; they must stop trying to prove that the crime occurred, and instead, focus on proving that their content is authentic and real.

This requires a fundamental investment in content athenticity infrastructure. This involves technologies such as:

• Digital watermarks
• Crytographic signatures (C2PA Standard)
• Public ledgers

“Yes, content authentication is becoming unavoidable. The burden of proof has shifted from detection to provenance. Here’s what that means; generative AI has made content creation effortless. Which flips authenticity into a competitive advantage. Watermarking and provenance tools are not nice to have anymore, they are the entry fee for operating in trust-sensitive markets,” said Amit Jaju, Senior Managing Director – India, Ankura Consulting.

Resilience, not expense

For smaller and medium-sized enterprises (SMEs), this authenticity infrastructure is significant, often prohibitive, new cost. It risks creating a two-speed digital economy where only large enterprises can afford the requistie defence. This necessary investment is what the industry is calling the “Authenticity Tax.”

However, experts argue that viewing this solely as a liability misses the strategic value of resilient content. It is a foundational shift in how digital trust is built and maintained.

"Authentication has effectively turned into a new “trust tax.” With generative AI making high-quality fakery inexpensive and ubiquitous, legitimate businesses are forced to invest in watermarks, provenance metadata, and verification systems just to prove their content or identities are genuine. This isn’t an optional safeguard, it’s the unavoidable price of maintaining credibility in a world where deception has been reduced to near zero cost. AI has made fakery so cheap that proving authenticity now comes at a cost credibility online has become a built-in tax for anyone operating honestly," said  Shrikrishna Dikshit, partner – Digital and Cyber Security, Baker Tilly ASA.

The challenge of interoperability

The long-term sustainability of this defense relies heavily on open standards and interoperability. If fragmented, proprietary watermarking systems continue to be the norm, a watermark added by one creator can be easily removed or ignored by a major cloud vendor or social media platform, rendering the effort useless. The mass adoption of standards like C2PA (Coalition for Content Provenance and Authenticity) is the only path to turning this high-cost defense into standard, affordable infrastructure.

In the era of effortless AI forgery, authenticity is no longer a given; it's a feature that must be expensively engineered and rigorously maintained. The "Authenticity Tax" is the cost of operating in a trust-deficient digital world. For those who choose not to pay it, the ultimate price will be irrecoverable IP loss, pushing the burden of proving innocence onto the shoulders of the rightful creators.