Watch out. Companies are using ‘AI washing’ to mislead consumers.
The Washington Post
January 29, 2024 at 7:00 a.m. EST
The Securities and Exchange Commission has a name for the ways some firms are abusing the hottest new trend in technology: AI washing. SEC chief Gary Gensler warned last month that some companies are making fraudulent claims that their products incorporate artificial intelligence to take advantage of buzz rather than reflecting a firm’s real capabilities. “Don’t do it,” Gensler said. “One shouldn’t green wash, and one shouldn’t AI wash.”
Like so-called greenwashing — the puffed-up promise by some on Wall Street that their investments will save the planet when they’re really just trying to make a buck — AI washers are attempting to exploit a fad. By slapping the letters “AI” on their offering, even if their product simply is gussied up software, some companies stand to puff up their valuations, sucker investors and mislead consumers.
The SEC isn’t the first regulator to sound the alarm. Last February, the Federal Trade Commission warned companies against using “AI” as a fraudulent marketing tactic. “At the FTC, one thing we know about hot marketing terms is that some advertisers won’t be able to stop themselves from overusing and abusing them,” a commission lawyer wrote in a blog post. “Before labeling your product as AI-powered, note also that merely using an AI tool in the development process is not the same as a product having AI in it.”
Keep reading here.