This paper presents an abundantly discussed topic with a deeper and focused context: the practitioners’ perceptions of the real use of AI in higher education and its consequences. Based on three research questions about how teachers perceive the challenges and opportunities of AI, specifically Generative AI, this study delves into how teachers naturally incorporate AI and its impact on higher education assessments when they contemplate the assessment landscape in their context, their foreseen benefits and threats, and how it impacts their future assessment practices in the growing digital world. Data from eight interviews of teachers at bachelor’s and master’s levels in a Swedish Engineering University were analysed using reflexive thematic analysis methodology. The results revealed a spectrum of perceptions, including known warnings about uses of AI, particularly when it is employed to generate knowledge elements that are directly evaluated by grading criteria. More nuanced concerns, such as the risk of over-relying on language correction tools or ideation support, were highlighted. Such practices may inadvertently hinder the development of essential cognitive and communicative skills, including critical thinking, creativity, and academic writing. Thus, findings pointed to the need for thoughtful boundaries and informed practices, including specific checkpoints to guide the responsible and pedagogically sound integration of AI in assessment contexts. As such, these insights serve as a foundation for developing practical guidelines and checklists for AI use in real-world higher education assessment scenarios.