Powell’s Books is a well-loved independent new and used bookstore based in downtown Portland, OR, often cited as the world’s largest. Recently, however, this fan favorite spot found itself at the center of the latest AI controversy that left a bad taste in customers’ mouths.
Here’s what happened, how Powell’s Books responded to the criticism and lessons marketers can learn about AI responsibility, transparency and customer satisfaction.
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What Happened? Suspected AI-Created Images on Powell’s Merch
In September 2025, Powell’s dressed its store with new merchandise, including graphic hoodies and t-shirts. Shortly after the new designs hit the floor, one in particular — showing a wolf standing on a stack of books — got a lot of attention.
A customer pointed out on Reddit that parts of the design looked odd. There are malformed and misaligned book bindings, strange proportions and a general AI vibe that threw them off.
In the uprush of scrutiny that followed, Powell’s released a statement saying that the image was created by a “local artist using Adobe tools, which now include some AI-assisted features.”
The message this statement tries to make is that the image wasn’t entirely created by a generic AI model, but rather by a human artist using AI software features. Even so, many commenters are still skeptical about the extent of AI’s role in the designs.
Powell’s also emphasized that they “value the work of human artists and designers” and want future designs to be more clearly tied to local artists. To remedy the situation, they invited submissions from local artists for upcoming seasonal merch.
While their response time and sentiment may look fine, Powell’s workers via their union’s Facebook page (ILWU Local 5), say that they’ve been raising concerns about the use of AI in merchandise designs for months, but felt leadership hadn’t adequately responded.
Key Issues & Concerns
One of the foremost concerns of Powell’s community was the irony of monetizing AI art as a beloved bookstore selling proudly and painstakingly crafted human stories. Using AI to market itself feels like it severely undermines the store’s most fundamental purpose.
Fans, customers and commenters had other understandable gripes about transparency, artistic integrity, attribution and attention to detail. Many people felt Powell’s didn’t clearly disclose its use of AI-assisted tools, which raised questions of honesty and trust.
Even with Powell’s reassurances and remedies revealed in its statement, some customers still have concerns — not just about the brand’s integrity and internal review processes, but what this could mean across creative industries in the future if it’s not appropriately rectified now.
Reddit user u/nutt3rbutt3r had this to say in a thread about the issue:
“Not vetting the artist or not having a creative/art director with a discerning eye… that’s far from excusable for a company like Powell’s (even if no one is surprised). Excuses breed ignorance. As we move forward into the inevitable future of GenAI being more prevalent, we need to set the standards now.”
u/wallcutout agrees, responding:
“It’s a massive oversight to not have anyone with a discerning or critical eye stop those from going into production and it does look bad for the company.
Them taking steps to remedy things moving forward is important if they want people to think their business does actually continue to support the values it was built on.”
Producing any kind of material — especially if you’re selling it to your audience, who has come to expect a certain quality — necessitates thorough internal review processes. Had there been such processes in place or more care taken during them, Powell’s could have avoided scrutiny altogether.
What Marketers and Brands Can Learn From Powell’s AI Scandal
There are lots of valuable lessons brands and marketers can take away from Powell’s case when it comes to AI in marketing and the responsibility that comes with using it.
1. Transparency Is Non-Negotiable
Customers criticized Powell’s not just for using AI-assisted tools, but also for not clearly communicating it and even potentially refusing to acknowledge the true extent of AI’s involvement in their merch design process. All of these are considerable mistakes on their own, but together they become even more reputationally damaging.
Consumers are quick to spot inconsistencies, and the fallout from perceived deception can easily outweigh the convenience of not disclosing.
There is nothing inherently wrong with wanting to use AI to enhance your workflows in a time when it’s becoming increasingly common, but there is something wrong with passing AI-generated work as human-created, or passing blame to a hired artist. Whether that artist used AI or not, final responsibility lies with Powell’s to vet contractors and perform quality checks.
2. Customer Expectations Shape the Rules of Engagement
Even though AI-assisted tools are common in creative software now, industry norms bear no weight when your customers expect better from you. Powell’s customers don’t care that AI tools are readily available — they care about what they expect from their favorite bookstore.
Marketers need to know their audiences’ expectations and sensitivities. What’s standard in the industry doesn’t always matter if it conflicts with brand perception. If you’re unsure where to start or are too far removed, you can do an audience-first audit before rolling out content.
3. Brand Values Must Align With Execution
Speaking of expectations: Powell’s has become something of a Portland icon known for cultivating local creative culture. Their market alone (books, storytelling, publishing) connotes certain customer expectations (human creativity, art, authenticity). Their history of supporting local artists instills further expectations that Powell’s operates on community and creativity. The AI-assisted merch clashed with those expectations, and customers felt burned.
It’s not unusual for successful companies to work with third-party tools, contractors, freelancers, agencies or other creative partners, but they must reflect your brand ethos. Thoroughly vet partners before signing contracts to ensure values align.
On the other hand, if you market authenticity, craftsmanship or community, leaning too heavily on automation can undermine those promises. If you need to make workflow changes that contradict what you tell your audience is important to your business, communicate it clearly in advance, explaining why those changes are necessary or what your audience can expect as a result.
4. If Employees Raise Concerns, Take Them Seriously
Powell’s union said employees raised concerns about AI use months before the scandal went viral. Leadership’s lack of proactive response only amplified the backlash when details began surfacing.
Employees are the closest people to your operations, meaning they often know when something might feel “off-brand” or alienate your audience. Building an internal feedback loop can prevent PR flare-ups.
5. AI Isn’t Always the Problem, But Poor Positioning Is
The backlash wasn’t necessarily about the tech itself, but about its fit with the brand and that Powell’s didn’t communicate or disclose how they intended to use it.
Marketers should think carefully about where AI enhances customer experience (efficiency, personalization, insights) versus where it feels like a betrayal (art, authenticity, creativity).
The Final Lesson: Trust Trumps Everything
Reading through Reddit threads and news articles, people are split on whether they think the Powell’s Books remedies offered are enough. Whatever side of the argument you land on, there’s a final lesson here for brands big and small: trust is everything.
Audiences today expect brands to live up to their values with consistency and transparency, and even small missteps can create outsized backlash. Technology like AI can be powerful, but you must apply it thoughtfully in ways that strengthen rather than undermine your brand story.
