AI Watermarking and Business Impacts
In early August, Anthropic announced they would use machine-readable watermarks in Claude outputs. The response was swift and strong; many people belabored this as intrusive, unreliable, and the death knell for AI use in content while others applauded transparency and oversight. So, what’s the reality and should AI watermarking impact business use of AI tools and asset production?
Important to know is that Anthropic is making changes because of a provision of EU AI law: Article 50(2) of the EU AI Act (Regulation 2024/1689). This provision requires any vendor that generates synthetic text or media to mark outputs so machines (i.e., machine readable) can identify the media as artificially manipulated or generated. There are details about format and results included as well, and the EU published a code of practice to help inform a compliance path forward for vendors to meet the legal requirements.
Most major providers of AI generated content now add invisible watermarks to some or all of their generations including Anthropic, Google, Microsoft, OpenAI, and Meta. But how and how much differs. For example, OpenAI does not currently watermark text outputs in ChatGPT but it does watermark generated images and audio.
Watermarking is not the end all be all for AI identification even though most AI providers are now using it to comply with EU law. As a guarantor, watermarks are… fragile. There are tools to remove these watermarks, the watermarks degrade with editing, and they’re bluntly just not always accurate. However, they are a strong step up from AI identification tools that only rely on common AI patterns.
Fragile or not, people are looking for watermarks now. There is a popular subreddit r/isthisAI where people post to see if media (images, video, audio) were AI generated or manipulated. Some of these are random things a friend posted on social media (e.g., someone wanted to know if a friend’s photo of their shopping spree goodies was AI… conclusion: Yes). But most people are wondering if this business is using AI in their marketing materials or products.
SynthID, a watermark identification tool from Google, is one of the biggest tools that posters are using to vet AI generation. (Note that SynthID is not AI identification but specifically watermark identification).
In r/IsthisAI, the businesses being vetted include small independent artists selling individual commissions all the way up to ads from very large businesses. This week’s top posts so far include:
A local art club poster (Is it AI conclusion? Yes.)
An artwork commission (Is it AI conclusion? Uncertain.)
A restaurant’s Facebook post (Is it AI conclusion? Yes.)
A Colorado governor candidate post (Is it AI conclusion? Whoooa yes.)
A mall display of Cadbury chocolate (Is it AI conclusion? You bet.)
People in the sub are both trying to get better at AI identification, but they’re also trying to vet their purchases and brand support. Posts include statements such as “It really sucks that mainstream companies are now using AI.” (Note that r/IsthisAI rules say no pro-AI or anti-AI spam, but there is a lot of casual conversation showcasing negative sentiment towards AI use).
In addition to this anecdotal but loud example of “anti-brands who use AI” sentiment, there have been several surveys also demonstrating negative sentiment towards AI use by brands. The 2026 Bentley University-Gallup Business in Society survey showed that 49% of people view business use of AI negatively (25% very negative and 24% somewhat negative) compared to only 19% who view it positively (5% very positive and 14% somewhat positive).¹ A Gartner poll showed very similar results with 50% of consumers saying they would prefer businesses not use generative AI.²
So, what should businesses do now that:
Watermarks can sometimes very clearly mark media as AI generated or manipulated,
People are using watermark tools, and
Surveys show that some people steer clear of brands who use generative AI?
Businesses should be asking themselves, “If this content has a big old sign that says ‘AI used’ on it, would it change what and how we produce our content?” The answer isn’t going to be the same for all businesses. There seems to be stronger anti-AI sentiment in media and journalism, the creative arts, and the beauty industry. Also, people might be less likely to check for watermarks or even ponder about AI generation if the AI use was minor (e.g., a minor piece of a human generated photograph was removed by an AI tool versus the entire image was created with AI.)
Since AI is already part of the workday, clear guidelines and expectations need to be defined. This has been true since the inception of generative AI, but even more now with growing AI sentiment and watermarking. Many brands probably don’t know whether content put out under their brand name was AI manipulated. An employee might have create a social media post with ChatGPT or completely changed the background of a magazine advertisement. More and more businesses are implementing AI-use procedures, but it’s still widely the wild west.
If you’re considering defining or adjusting AI guidelines, some questions to ask and define include:
What tools are acceptable?
What information can be entered and shared?
What work needs to be reviewed?
What work needs additional oversight?
Should and then how should asset creation and manipulation be documented?
How should we disclose to people seeing or using our content?
In addition, we recommend that human expertise and involvement still be a large part of brand presentation. This coincides with another AI term floating around “meat proxy.” Brand content should still really reflect the subject matter experts and people at the heart of the brand.
Skepticism in consumers seems to be on the rise, so reducing risk and building trust should be a prominent part of brand building.