The State of Auth in AI Apps: 2025
Source: Dev.to
In the last two years, the way software enters an organization has changed more than it did in the previous decade.
A single person tries a new AI tool out of curiosity. Their team adopts it the same week. By next quarter, it’s powering core workflows.
This bottom‑up pattern has become the defining distribution motion for AI products. But when we conducted a detailed teardown of 50+ modern AI companies, something interesting surfaced. The story people tell about growth is incomplete.
If you zoom in closely—beyond interface and features, beyond the usual PLG playbook—you find a set of decisions that quietly shape the ceiling on adoption:
- How users sign up
- How organizations form
- How access is managed
- How identity fits into enterprise workflows
This article articulates that hidden layer: not as a celebration of “good UX patterns,” but as an examination of the structural choices that hundreds of fast‑growing AI companies are making—sometimes deliberately, more often accidentally.
Passwordless isn’t a trend. It’s the natural consequence of AI‑era onboarding
In traditional SaaS, logging in was a neutral event—a gate that preceded the experience.
In AI products, login is the experience, or at least the first measurable success or failure as AI’s early adopters tend to be experimental, impatient, and operating in short loops.
A password prompt introduces a speed bump at precisely the moment the product needs momentum. It becomes a founding decision, made long before company maturity or security frameworks would normally justify it.
Teams adopt passwordless not only because it is more secure, but because:
- users try AI tools casually
- evaluation happens in seconds, not sessions
- repeated password‑based logins fragment the onboarding arc
- password recovery destroys activation rates
What’s striking is that once companies adopt passwordless, the decision becomes irreversible. No product meaningfully scales back to passwords.
Where do companies land?
The ideal auth system balances strong security with low user friction. Below is a snapshot of how some of the companies we analyzed position themselves on this spectrum.
The biggest UX improvement in identity are also the quietest
If passwordless is the decision, user experience is the implementation. Teams often talk about authentication as if it’s binary—passwords or not. The reality inside fast‑growing AI products is far more nuanced.
Our analysis of 50+ modern AI companies revealed a clear pattern: passwordless succeeds only when the surrounding UX removes every ounce of hesitation. A single moment of friction can erase all the theoretical benefits.
A bad signup or login experience drives 88 % of users away, leaving margins for error vanishingly small.
Across the dataset, four UX shifts stood out—some now table stakes, others quietly spreading, and a few still early but advancing toward inevitability.
a) The quiet disappearance of “Sign up” vs. “Log in”
The first choice most products present—“Do you already have an account?”—is anchored in an assumption that no longer holds. Users don’t track whether they created an account last quarter, during a hackathon, via a teammate invite, or with a different login method. The distinction between “signup” and “login” is a construct of product teams, not of user intent.
Nearly 75 % of the products we analyzed now collapse signup and login into a single adaptive flow:
- Try to log in with no account → we create one.
- Try to sign up but already exist → we log you in.
This small ergonomics tweak eliminates:
- duplicate accounts created accidentally
- fragmented orgs caused by mismatched login paths
- workspaces users abandon because they can’t re‑enter
- SSO routing confusion
- support tickets asking, “Do I have an account?”
b) The industry standard for login is now one‑tap
Traditional OAuth login was once seen as “fast,” but in practice it redirects you to Google’s page, asks for permissions, then redirects back—three pages for one action.
One‑tap login collapses that entire sequence into a single, in‑context interaction. It displays the user’s Google profile right on the page, authenticates instantly, and never sends them elsewhere.
What’s particularly interesting is that one‑tap runs on the same protocol as enterprise SSO—OpenID Connect. The only difference is the UI. In other words, consumer‑grade convenience and enterprise‑grade security are no longer opposites; modern identity collapses them into the same surface.
c) Passkeys are early today, inevitable tomorrow
Passkeys still feel new, but their trajectory mirrors the early days of 2FA: low adoption at first, followed by a rapid curve upward as platforms bake them into defaults.
The underlying shift is fundamental. Passkeys:
- eliminate shared secrets
- turn devices into authenticators
- collapse “something you have” and “something you are” into one gesture
They introduce authentication that works without the conceptual overhead of passwords or the friction of codes. The pattern resembles 2FA’s curve: niche → recommended → expected. What looks optional now will become table stakes in 3–5 years.
d) Context switching has become a baseline expectation
As AI products embed themselves inside companies, users aren’t just switching between a web app and a native app—they’re moving between multiple identity contexts (personal, work, project‑specific). Modern auth experiences now anticipate and streamline these switches, ensuring that a user can hop from a personal notebook to a corporate AI assistant without re‑authenticating or confronting additional prompts. This baseline expectation pushes providers to adopt unified, context‑aware flows that respect both security policies and the need for frictionless movement.