Here is what I did to reduce the testing time.

I created a fake hash provider to skip the bycrypt hashing in while testing. This improved test speed to over 50%.

defmodule MyApp.Accounts.User.HashProviders.TestHashProvider do
  @behaviour AshAuthentication.HashProvider

  @impl true
  def hash(input) when is_binary(input) do
    # Fake hashing logic: prefix the input with "fake_hash_"
    {:ok, "fake_hash_" <> input}
  end

  @impl true
  def valid?(input, "fake_hash_" <> input), do: true
  def valid?(_input, _hash), do: true

  @impl true
  def simulate do
    # For testing purposes, return false to simulate a hash check
    false
  end
end

Then, I made it configurable in config/test.exs like the following

# Do NOT set this value for production
config :ash_authentication, hash_provider: MyApp.Accounts.User.HashProviders.TestHashProvider

3. I told User resource to pick the hash provider from configuration if available like the following

# /lib/my_app/accounts/user.ex
defmodule MyApp.Accounts.User do
  #...
  authentication do
    strategies do
      password :password do
        identity_field :email
        # Tell AshAuthentication to use a faker hash provider to speed up tests
        hash_provider Application.compile_env(
                        :ash_authentication,
                        :hash_provider,
                        AshAuthentication.BcryptProvider
                      )
      end
    end
 #...
end