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In this video tutorial, the creator uses AI to make watermarks disappear from images in Photoshop. The process involves using machine learning, specifically deep learning with neural networks, and requires a large amount of data, a large neural network, and CUDA cores. The goal is to have an input image with a watermark (X) and a corresponding image without the watermark (Y). The creator acknowledges the questionable legality and ethics of this project but proceeds with demonstrating the use of AI to remove watermarks effectively.