How Cybercriminals Use Fake AI Businesses and Convincing Domains to Steal Credentials

Introduction

Artificial intelligence tools are everywhere, including chatbots, image generators, coding assistants, and productivity platforms. This rapid adoption has created a perfect opportunity for cybercriminals. By creating fake AI tools and businesses hosted under highly convincing domain names, attackers can trick users into handing over login credentials, API keys, payment details, or corporate access.

This article explains how these scams work, real-world examples, and practical steps individuals and organizations can take to avoid becoming victims.

Why AI-Themed Scams Are So Effective

Cybercriminals deliberately frame their scams around AI for several reasons:

• High curiosity and hype: Users actively search for new AI tools.
• Low baseline knowledge: Many users cannot easily distinguish real AI services from fake ones.
• Trust in technical branding: AI startups are expected to look modern, minimal, and technical.
• Urgency and exclusivity: Claims like “limited beta access” or “early adopter invitation” pressure users into acting quickly.

Together, these factors reduce skepticism and increase click-through and credential submission rates.

How Fake AI Businesses Are Built

1. Convincing Domains and Branding

Attackers register domains that closely resemble legitimate AI companies or sound plausible as startups.

Common tactics include:

• Typosquatting, such as missing letters or extra hyphens
• Brand-adjacent names, such as adding words like ai, labs, cloud, or studio
• Subdomain abuse, such as login. or dashboard. prefixes

These domains are often paired with:

• Professionally designed landing pages
• Stock photos of “engineering teams”
• Fake testimonials and logos of well-known companies

2. Fake AI Functionality

Instead of building real AI systems, attackers:

• Use simple scripts or open-source demos
• Embed ChatGPT-like interfaces that do not actually process input
• Show pre-rendered responses or loading animations

The goal is not functionality. It is credibility that lasts long enough to capture credentials.

3. Credential Harvesting Mechanisms

Once trust is established, users are prompted to:

• “Sign in with Google, Microsoft, or GitHub”
• Enter corporate email credentials
• Paste API keys
• Create accounts using work passwords

Behind the scenes:

• Login forms post data directly to attacker-controlled servers
• OAuth-style buttons lead to fake authorization screens
• Password reuse allows attackers to pivot into other services

4. Monetization and Follow-On Attacks

Stolen credentials are then used for:

• Business email compromise (BEC)
• Cloud and SaaS access
• Data theft or ransomware staging
• Resale on underground markets

Real-World Examples

Fake ChatGPT and AI Tool Websites

Since the rise of generative AI, security researchers have documented hundreds of fake websites impersonating:

• ChatGPT
• AI image generators
• AI writing and coding assistants

These sites often rank well in search results or appear in sponsored ads, leading users to phishing pages that mimic real login portals.

WormGPT and “Underground AI” Scams

Criminals have advertised so-called malicious AI tools, such as WormGPT, through polished websites and Telegram channels. In many cases:

• The tools never existed
• Buyers received nothing
• Payment and identity details were harvested

Ironically, even cybercriminals became victims of fake AI businesses.

Fake Enterprise AI Platforms

Attackers have also targeted businesses by advertising:

• “AI-powered HR tools”
• “AI security copilots”
• “Private LLMs for enterprises”

Employees were asked to sign in with corporate credentials to access demos, unintentionally handing over access to internal systems.

Warning Signs to Watch For

Be cautious if an AI platform:

• Pressures you to sign in before showing any functionality
• Requires credentials or API keys for a demo
• Has no verifiable company history, team, or legal information
• Uses recently registered domains
• Lacks documentation, privacy policies, or support channels

How to Avoid These Attacks

For Individuals

• Verify the domain carefully, character by character
• Avoid signing in via links from ads or social media
• Use a password manager to spot mismatched domains
• Never reuse passwords across services
• Enable multi-factor authentication (MFA) everywhere possible

For Organizations

• Provide security awareness training focused on AI-themed phishing
• Restrict OAuth permissions and third-party app access
• Enforce business policies on AI tool usage to prevent employees from using unvetted online services
• Implement conditional access policies
• Use phishing-resistant MFA for critical systems

For Developers and Security Teams

• Educate users on official domains and access paths
• Publish clear guidance on how your product authenticates users
• Monitor for brand impersonation and take down fake domains quickly

Conclusion

Fake AI businesses represent a new evolution of phishing and credential harvesting. By combining cutting-edge branding with convincing domains and social engineering, cybercriminals exploit both curiosity and trust.

As AI adoption continues to grow, skepticism, verification, and strong authentication practices remain the most effective defenses.

Understanding how these scams operate is the first step toward staying ahead of them.