By Vinod K Singh, Co-Founder and CTO of Concirrus
In the last couple of years the term “AI washing”, similar to the concept of “greenwashing” in the environmental field has become not just a buzzword but a phenomenon. AI washing describes how companies either exaggerate or make up their AI capabilities in attempts to lure in the latest and greatest AI revolution. In fact, just like greenwashing, and portrays a wrong impression of innovation and progress in technology. In fact, AI has nowadays become a marketing label for many businesses, for which the products may have little or no real AI technology involved. This trend will be driven by various motives: competitive pressure, marketing appeal, and attracting investors. However, AI washing has significant negative consequences, including eroded trust, stifled innovation, and potential regulatory issues.
Marketing Appeal and Competitive Pressure
Resistance to the lure of AI is impossible. It is seen as the bleeding edge, the technology that finally makes possible all those things that were previously considered to be the
realm of science fiction. Companies know AI is a buzz, and they overpromise and overhype their capabilities to leverage that excitement. In actual instances, the implementation of true AI is complex and requires significant investment in three major dimensions: talent, data, and infrastructure. The superficial AI claims are more about headline-grabbing than about actual benefits. And when the dust settles from all that hype, there is only true innovation standing.
There is a feeling among companies in the extremely competitive marketplace that they need to match or outstrip their competitors’ AI claims through this snowball effect,
everything will be branded as powered by AI. The result would be some sort of an arms race where the focus shifts from actual development to beating the competition with the boldest and usually wildest claims. This quickly can become a self-defeating race: companies can invest more in branding than substance, creating a spiral of disillusionment as it dawns on customers and partners what reality is.
Investor Attraction and the Risk of Erosion of Trust
AI’s potential to revolutionize industries makes it a magnet for investors keen on supporting the next big thing. Companies, aware of this, may overemphasize their AI initiatives to secure funding. However, the gap between promise and reality can lead to significant issues when investors demand results that the so-called AI cannot deliver. While AI can attract capital, the long-term success of such investments depends on the genuine deployment and impact of AI, not just on its promise of it.
When companies make exaggerated AI claims that they cannot back up, they risk eroding the trust of their customers, investors, and the broader market. Trust, once lost, is hard to regain, and the damage can extend far beyond the initial deception. Trust is a cornerstone of business success, and without it, even the most innovative companies can fail. In the complex and often misunderstood field of AI, authenticity and honesty are crucial.
The Importance of Solving Real Business Problems
Equally, there is the risk associated with the tendency to use AI as a shiny new hammer in forcing solutions where it may be irrelevant. It would be much better if businesses first determined the actual problems they want to solve. It is only after a clear definition of the problems that they would consider whether and how AI can help them solve their problems. If there isn’t a real need for AI, it becomes very important not to force it into the solution. AI is not a panacea to solve every problem; the value of AI is in solving particular well-bounded challenges. Forcing solutions of AI where they don’t apply results in ineffective solutions and contributes to ‘AI washing’ practices that corrode trust and stifle innovation.
Regulatory Risks and the Path Forward
With the increased prevalence of AI washing, regulators’ attention is being brought to the issue with growing concern due to misleading claims and potential harms. The risk of legal and compliance issues only goes up when governments or industry watchdogs actually begin scrutinizing the claims of AI a little more closely. The cost of AI washing is not just reputational but could soon be financial as well, with fines, sanctions, and increased oversight for companies that fail to live up to their claims.
That being said, transparency, genuine investing in AI on the part of business, and above all, the right thing to do for integrity’s sake keep these matters paramount. Focus on real-world applications and value accrual, not hype. In so doing, the true potential will be unleashed and long-term stakeholder trust built.
