Fake It Until You Make It: Companies Are Bamboozling Investors and Customers with ‘AI Washing’

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As artificial intelligence continues to make headlines, some companies are being accused of “AI washing” — overstating the capabilities of their AI technology.that the phenomenon of “AI washing” has been gaining attention in recent months, as more companies claim to use AI in their products and services. The term, a play on “green washing,” refers to companies making over-inflated claims about their use of AI.

The rise of AI washing can be attributed to several factors, including competition for funding and the desire to appear on the cutting edge. According to OpenOcean, a UK and Finland-based investment fund for new tech firms, only 10 percent of tech start-ups mentioned using AI in their pitches in 2022, but this rose to more than a quarter in 2023 and is expected to be more than a third this year.

AI washing can have concerning impacts for businesses, from overpaying for technology and services to failing to meet operational objectives the AI was expected to help them achieve. For investors, it can make it harder to identify genuinely innovative companies. And for consumers, unmet expectations from products claiming to offer advanced AI-driven solutions can erode trust in start-ups doing genuinely ground-breaking work.

 

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