AI is fuelling a trust arms race as Stakk raises the stakesAs AI supercharges digital fraud, Stakk is building the infrastructure to help businesses work out who – and what – they can trust.Eddy Sunarto5 min readSeptember 7, 2026 - 6:45AMStockheadAI is driving more sophisticated identity and document fraud. Pic: Getty ImagesStockheadDon't miss out on the headlines from Stockhead. Followed categories will be added to My News.AI is fuelling a digital trust arms raceStakk adds scale with ParaScriptBig money is chasing digital trust Artificial intelligence has spent the past few years making businesses faster and smarter.But unfortunately, fraudsters have been enjoying exactly the same upgrade.Fake identities are becoming easier to create, documents easier to manipulate and scams easier to produce at scale.Suddenly, working out whether the person, document or transaction sitting on the other side of a screen is actually genuine is becoming a much bigger problem.And there is a pretty simple economic argument behind all of this: if AI makes faking something more convincing, proving something is real becomes more valuable.That is starting to create what looks increasingly like a trust arms race.For ASX-listed Stakk (ASX:SKK), the timing is interesting.The company has spent the past year building out its AI-native Digital Trust infrastructure.It is now close to completing the US$63 million acquisition of US-based ParaScript, adding AI-powered document intelligence and fraud detection to its capabilities.AI is making the fraud problem nastierThe Commonwealth Fraud Prevention Centre warned in August that AI is making fake identities, manipulated documents and scams easier to produce at scale.The technology cuts both ways, of course.AI can also analyse huge amounts of information, identify suspicious patterns and spot anomalies that older fraud detection systems might miss.That is what makes the next phase particularly interesting.AI is effectively improving the weapons on both sides at once – and businesses caught in the middle still have to make millions of decisions about who and what they can trust.A bank still needs to know whether the person opening an account is genuine.An insurer needs to know whether a document has been manipulated.A healthcare platform needs confidence that the person accessing sensitive information is actually entitled to see it.None of those problems are new, but AI potentially makes them much harder to manage.For years, the internet's great achievement was making almost everything easier to do online.The next challenge is making sure the person doing it is actually who they say they are.Canberra is already movingThere is a pretty clear sign that identity protection is becoming a much bigger priority, rather than just another cybersecurity headache.On August 31, the Australian government announced IDLock, a new service that will eventually allow Australians to block, unblock and monitor the use of eligible identity documents through the Document Verification Service.The government's existing Credential Protection Register has already blocked more than 830,000 fraudulent identity verification attempts since late 2022, averaging around 18,000 attempts every month.That's a lot of people trying to convince a computer they're somebody else.IDLock has no direct commercial connection to Stakk, and investors shouldn't read one into it.What it does provide is a useful snapshot of where the broader market is heading.So what exactly does Stakk do?Stakk describes itself as an AI-native Digital Trust infrastructure provider, which sounds complicated until you boil down what the technology is actually trying to achieve.Essentially, it helps organisations make decisions about digital interactions.Is this customer actually who they claim to be? Does this login look suspicious?Is this transaction legitimate? Should this person be allowed through?Traditionally, those jobs have been split across different providers handling identity, fraud, authentication and transactions.Stakk is trying to bring more of that into a single infrastructure layer capable of making trust decisions in real time.Its Stakk IQ platform brings those different trust functions together in one place.The interesting part isn't necessarily any one of those functions by itself.It is what happens when they operate together and the platform can build more context around the interaction it is assessing.That becomes increasingly important when fraudulent identities and documents themselves are getting more sophisticated.ParaScript adds another piece of the puzzleThat is also what makes Stakk's proposed acquisition of ParaScript particularly relevant to the current AI fraud landscape.Stakk agreed in July to acquire the US-based business for US$63 million, with the transaction now approaching completion.ParaScript specialises in AI-powered document intelligence and fraud detection - technology designed to extract, analyse and validate information contained within documents.ParaScript would bring that capability into Stakk's broader Digital Trust infrastructure while also dramatically increasing the group's scale.Stakk says the combined business is expected to serve more than 300 enterprise customers globally and process more than 100 billion digital interactions annually.That comes after Stakk’s standalone FY26 revenue surged 1,098% to $14.89 million, up from just $1.24 million a year earlier.Read more here: Stakk swings to profit as revenue rockets 1,098pcThe company has also said the combined group enters FY27 positioned to meet - and potentially exceed - pro-forma objectives of approximately $55.2 million in revenue and $18.5 million in EBITDA.Those numbers are objectives rather than guarantees, and investors will ultimately judge the acquisition on whether Stakk can integrate ParaScript and turn the promised scale into actual earnings.But if it works, the transaction would push Stakk into a considerably different league from the business it was even a year ago.Serious money is chasing digital trustThere is also some interesting valuation context coming out of the US.Identity verification and fraud prevention company Socure recently secured a US$156 million investment at a US$5.2 billion valuation.The round attracted some serious financial names - including Summit Partners, Goldman Sachs Alternatives and Wells Fargo.There is an obvious temptation here to draw a straight valuation line between Socure and Stakk, but that would be far too simplistic.They are different businesses at very different stages of development, so Socure's US$5.2 billion valuation isn't directly comparable to Stakk.What it does show is that serious capital is flowing into identity verification, fraud prevention and digital trust infrastructure.Much of the AI investment boom so far has focused on what the technology can create and automate.The next opportunity could partly come from cleaning up the mess.Other ASX stocks in this spaceThere aren't many direct Stakk peers on the ASX, although a handful of small caps operate in neighbouring parts of the digital trust market.One Click Group (ASX:1CG) operates One Click Verify, a digital identity verification platform that connects with the Australian Government's Document Verification Service and helps businesses verify customers and meet compliance requirements.Kinatico (ASX:KYP) is a RegTech company focused on workforce screening, verification and ongoing compliance monitoring through its "Know Your People" technology.Identitii (ASX:ID8) is a little further removed, with its BNDRY platform helping organisations manage financial crime risk and compliance processes, including customer identification, transaction monitoring and regulatory reporting.Codeifai (ASX:CDE) operates self-service SaaS platforms spanning authentication, data verification and secure digital transactions, using technologies including AI, serialised QR codes and post-quantum cryptography.Its QuantumAI Secure platform is focused on securing fund and file transfers.At Stockhead we tell it like it is. While Stakk and Codeifai are Stockhead advertisers, they did not sponsor this article.This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decision.Originally published as AI is fuelling a trust arms race as Stakk raises the stakesMore related storiesStockheadThe bond sell-off is not over, and only a fool would think otherwiseSovereign bond markets may have steadied, but Nigel Green says a shrinking buyer base and rising debt issuance point to deeper trouble ahead.Read moreStockheadWest Wits eyeing high-grade gold growthIt may have produced 22% of all the gold ever produced but South Africa’s Witwatersrand Basin still holds plenty of opportunity for West Wits Mining.Read more