AI Washing

• Context (IE): Tech companies and startups are marketing themselves using AI but not doing so, forming the basis of ‘AI Washing’.

AI Washing

• AI washing is a marketing tactic where companies exaggerate the involvement of Artificial Intelligence (AI) in their products and services.
• Advertisements that overstate the capabilities of a company’s AI tools or mislead consumers about features that are not yet operational in their AI products also constitute AI washing.
• For example, a business may state that its product is “powered by AI” when, in fact, artificial intelligence plays little or no role.
• This term is derived from greenwashing, where companies exaggerate their environmental friendliness to appeal to customers.
• With regulatory organisations such as the US Securities and Exchange Commission (SEC) pursuing businesses that make false claims about AI, the practice known as “AI washing” has spread worldwide.

Concerns about AI washing

• AI washing diverts management attention and resources away from practical AI innovation.
• It can complicate decision-making for businesses genuinely looking for valuable AI solutions.
• AI washing can deceive consumers, mislead investors, and break existing laws surrounding vendor transparency and product disclosures.
• Promotes a monoculture in computer science, which is when a group of computers run identical software.
• This leads to a future financial crisis if many financial institutions all rely on the same underlying models.
• Data security and privacy risks.

Why companies engage in AI washing?

• Advertising generative AI (whether the product contains it or not) will attract funds from investors.
• Vague definition of AI.
• Before incorporating AI, some businesses may advertise it in their products.

How to prevent AI washing?

• Request hard evidence of the way AI is used in product offerings.
• Establish a collaborative culture that involves the buying process and keeps the buying team from falling for marketing hype.
• Businesses can prevent AI washing by labelling products truthfully, abstaining from hyperbole, and developing a robust compliance plan.