Piracy of digital intellectual property is rife across the internet and social media, and a major headache for content creators, owners and distributors. Advanced image manipulation techniques such as deep-fakes are causing untold misery and upending trust in what we see on the internet, with serious geopolitical implications.

Watermarking techniques have been developed to combat the unsanctioned use of digital assets. Until now though these have either been relatively simple to get around or markedly visible on content, reducing their value.

The Company

Steg.AI has changed the game with its invisible watermarking solution that embeds information into the light pixels of digital media. Utilizing advanced machine learning, Steg.AI’s enterprise security platform automates the protection of videos, gifs, and images, imbuing them with provenance.

The underlying technology is “Light Field Messaging,” conceptualized and created by Dr. Eric Wengrowski. Eric founded Steg.AI in 2019, with Professor Kristin Dana, who oversaw his PhD on photographic steganography (that is, concealing information within non-secret data).

Any organization wanting better intelligence, situational awareness, and protection of digital media assets can seamlessly make use of Steg.AI’s tools. Its API can be used alongside existing digital rights management and data loss prevention tools. Organizations can independently identify if their owned and proprietary media assets have been stolen, tampered with, or illegally distributed. Steg.AI can scan recovered media to determine its authenticity as well as pinpoint the moment and method by which it was compromised.

The Market and Opportunity

Social media, streaming, and sharing have exploded across the world, yet this exponential growth has not been matched by the development of tools to protect this content from unlawful copyright infringement, hijacked streaming video, illicit copying, and selling of videos and images.

The economic impact attributable to the misuse of digital content is calculated to be in the tens of billions of dollars, with the psychological toll being even heavier. These negative effects are only expected to grow and undermine innovation over the coming decades.

Over 75% of computers have at least one illegally downloaded application, and nearly a quarter of the world’s internet bandwidth is used for piracy. Global piracy of digital video has been estimated to cost the creative industries up to $80 billion in lost revenue. It is estimated that preventing motion picture and video piracy would have led to an additional 140,000 jobs in the U.S alone. The economics are compelling for the cheats, with the top pirate sites thought to bring in annual ad revenue of $230 million.

The potential application of Steg.AI’s solution is, hence, enormous, given that it can be applied to any form of digital media, regardless of the mode of creation, sharing, and consumption.

The Investment

Steg.AI was originally funded through a National Science Foundation grant and in 2022, the company signed its first major enterprise customer, a globally recognized consumer electronics brand.

In July 2023, Paladin Capital Group led a $5 million investment round with a group of leading deep tech institutional and angel investors. With Paladin’s Chief Investment Officer Christopher Steed joining the board, Steg.AI will use the funding to further build out its technology stack, product, and platform, and develop a repeatable and scalable go-to-market approach.

Since 2001, Paladin has focused its investments on making the world a safer place for people and organizations and, in the cyber age, we have become a leading investor in AI as it relates to security and trustworthiness.

Steg.AI is the type of innovation needed to protect our shared, critical infrastructure going forward. Its customers can use its steganographic approach across multiple business and operating divisions, such as marketing, media, security, and the protection of internal and external digital assets. We look forward to helping the company further its commercialization and extend its reach internationally, as its solutions are sorely needed across the globe.