How to Disclose? Strategic AI Disclosure in Crowdfunding

Mandatory AI disclosure significantly reduces crowdfunding success: When creators are required to disclose AI involvement, projects experience a 39.8% decline in funds raised and a 23.9% drop in backer counts, indicating substantial investor skepticism toward AI-integrated projects.

Transparency and authenticity can mitigate AI skepticism: High explicitness (clear, detailed explanations) and high authenticity in disclosures substantially reduce the negative effects of AI disclosure, suggesting that honest, straightforward communication helps restore investor confidence.

Emotional appeals backfire with AI disclosure: Counterintuitively, creators who use excessive positive emotional tone to counteract AI concerns actually worsen outcomes, indicating that overly enthusiastic messaging may trigger "AI washing" concerns and undermine trust.

Investor concerns center on creator competence and deception: The research identifies two key mechanisms driving negative reactions—concerns about whether creators are truly competent to manage AI projects, and fears that creators are using AI disclosure strategically to hide problems rather than genuinely inform investors.

The degree of AI involvement matters significantly: Projects with greater AI involvement experience amplified negative effects from disclosure, suggesting investors distinguish between projects that use AI as a minor tool versus those fundamentally dependent on AI technology.