Despite the rapid proliferation of AI tools, we know little about how people who use them are perceived by others. Drawing on theories of attribution and impression management, we propose that people believe they will be evaluated negatively by others for using AI tools and that this belief is justified. We examine these predictions in four preregistered experiments (N = 4,439) and find that people who use AI at work anticipate and receive negative evaluations regarding their competence and motivation. Further, we find evidence that these social evaluations affect assessments of job candidates. Our findings reveal a dilemma for people considering adopting AI tools: Although AI can enhance productivity, its use carries social costs.