Terrorist organisations and violent extremists are increasingly deploying a concept known as the 'liar's dividend' — originally coined by legal scholars Robert Chesney and Danielle Citron — to discredit security agencies, shield their losses, and widen their recruitment pipeline, according to officials from India's intelligence establishment.

What Is the 'Liar's Dividend'

The 'liar's dividend' is a counter-information tactic: when security agencies publish verified data about a terrorist outfit's operational failures or the death of a senior commander, the group responds by labelling that information as AI-generated deepfake content. The goal, according to an Intelligence Bureau official, is straightforward. 'In a nutshell, they try to pass off correct information as fake, and the main aim is to debunk what the agencies have claimed,' the official said. Rather than rebutting facts, the strategy is to make the very act of fact-release suspect.

How AI Supercharges the Threat

Separately from the 'liar's dividend', terror outfits are already using Artificial Intelligence (AI) extensively to generate and deliver radicalising content in local languages. Officials note that AI tools have made this process cheaper, faster, and significantly wider in geographic reach. Al-Qaeda and the Islamic State, in particular, are reported to use these tools for radicalisation, recruitment, operational planning, and incitement to violence. The convergence of AI-generated content with the 'liar's dividend' tactic creates a compounding credibility crisis for agencies: not only can fabricated material be made to look authentic, but authentic material can be made to look fabricated.

Pakistan-Based Outfits Among Those Adopting the Tactic

Officials specifically flagged Lashkar-e-Taiba and Jaish-e-Mohammed as outfits that have begun adopting this playbook. When Indian security forces announce heavy losses inflicted on these groups, the organisations reportedly invoke the 'liar's dividend' to dispute the claims and cast doubt on official accounts. The direct consequence is a recruitment one: potential recruits who might otherwise be demoralised by news of losses are offered a ready counter-narrative. 'Groups such as Al-Qaeda and Islamic State have been using this concept every time they suffer huge losses at the hands of the security forces. They also use it when an announcement relating to the death of a top leader or commander is made,' the official said.

Impact on Public Trust and the Justice System

Officials warn the threat extends well beyond the battlefield. When terror groups consistently challenge every agency release, public trust in official information channels erodes. 'This complicates matters, as the agencies then have to establish a separate channel to counter the claims being made by the terrorist groups,' one official noted. The 'liar's dividend' also poses a documented challenge to criminal investigations and prosecutions: it sows doubt in the judicial system, placing an added burden on investigators and prosecutors to prove that content disputing official findings is itself inauthentic. Another official characterised the tactic as 'aimed at eroding public trust in the system' — a long-game strategy that goes beyond individual operational denial.

The Radicalisation Pipeline

Officials describe a two-stage radicalisation model enabled by the tactic. First, repeated use of the 'liar's dividend' pushes a segment of the public away from the mainstream information ecosystem. Once that shift occurs, these individuals become targets for controlled, moderated information supplied directly by the terror group, significantly widening the scope for radicalisation. This comes amid a broader global trend of AI-assisted information warfare, where the line between authentic and synthetic content is becoming harder to establish — an asymmetric advantage that non-state actors are increasingly learning to exploit. Security agencies, officials said, are expected to face this tactic consistently after every future counter-terror operation.