A reverse-engineering report by researcher Xusheng Li reveals that Microsoft incorporates an invisible blind watermark into AI-generated images in the Paint and Photos apps. This watermark, independent of a toggleable Copilot watermark, originates from Microsoft's servers and is mandatory for image generation. Even when locally generating images with a stable model, prompts must be sent to Microsoft for review, and a GUID identifier embedded within the pixel data cannot be easily removed.
The watermark can be detected through C2PA metadata and pixel analysis, making typical alterations like cropping ineffective. The Photos app logs errors but still generates images even if watermarking fails, unlike Paint, which aborts the process.