Every product is now "powered by AI"?

Well, you're not wrong.

Companies are going crazy with AI claims, and not all of them are legit.

Welcome to the world of AI Washing

So, what's AI washing?

It's when businesses make their products sound fancier than they are by throwing around AI buzzwords. They're basically saying, "Look at us! We use AI!" even when they're barely using it (or not at all).

Why do they do this?

Simple: AI is hot right now. Everyone wants a piece of the pie, and companies know that slapping "AI-powered" on their product might make you more likely to buy it.

Here are some classic AI washing moves to watch out for:

1. Vague claims: "Our AI-enhanced software will revolutionize your workflow!" (But how exactly? They won't say.)
2. Overblown abilities: "Our AI can predict the future!" (Spoiler: It can't.)
3. Human work in disguise: Sometimes, what they call "AI" is just people doing the work behind the scenes.
4. Basic algorithms dressed up: They might use simple data analysis but call it "machine learning" to sound cooler.

Some founders worry that not mentioning AI in their pitch could put them at a disadvantage, even if it's not central to their solution," said Ayangar from the Open Ocean team.

Why Is This a Serious Issue?

You might think, "So what? It's just marketing." But hold up, it's way more serious than that:

1. Hiding real innovation: With all the noise, actual AI breakthroughs might get lost in the shuffle.
2. Fake it 'til you make it?: A 2023 study found 40% of "AI start-ups" barely used any AI. Yikes!
3. The copycat problem: Many companies might be using the same few AI models but pretending they're unique. This could spell trouble if everyone's relying on the same tech.
4. Inflated expectations: When companies overhype AI, it can lead to unrealistic goals and disappointment.
5. Financial risks: If too many financial firms depend on the same AI models, it could cause a big mess down the road.

SEC Chair Gary Gensler even warned that thousands of companies might be building on just a handful of AI models.

A FTC press release suggests some basic questions to help organizations figure out if they might be engaging in AI washing:

Ask these questions to yourself

1. Are you hyping up your AI product? If you're claiming it can do amazing things, make sure you have solid proof to back it up.
2. Is your AI really better than non-AI options? If you’re saying it outperforms other products, you need strong evidence, especially if it justifies a price increase or impacts job decisions.
3. Are you aware of the risks? Once your AI product hits the market, you're responsible for what happens, so know the potential downsides.
4. Is it truly AI-powered? Just using AI during development doesn’t automatically make your product "AI-powered." Make sure your claims are accurate.

The SEC and FTC are starting to crack down on AI washing.

Companies might face fines or other penalties for making false AI claims.

Read more about it

You may ask “How to avoid regulatory risk for AI washing” Read this for all the answers

Amazon's "Just Walk Out" Technology

Remember when Amazon promised us the future of shopping? Their "Just Walk Out" tech sounded like something straight outta sci-fi:

• No cashiers
• No scanning
• No waiting

Just grab your stuff and go, they said. The all-seeing AI eye would handle the rest.

Cameras, shelf sensors, and facial recognition would work their magic, and poof!

Your account's charged, and you get a receipt. Easy peasy, right?

Well, hold onto your shopping lists, folks, 'cause here comes the plot twist:

Turns out, behind that high-tech curtain were... drumroll, please... actual humans! ??

Yep, Amazon was employing people in India to watch camera footage and label what shoppers were buying.

A whistleblower (okay, a team member) spilled the beans that as of mid-2022, about 70% of sales in these "cashier-less" shops were checked by real, live humans.

This AI-powered dream started in 2016 as Amazon's "biggest and boldest innovation in grocery shopping."

Fast forward eight years, and Amazon's pulling the plug on the whole shebang.

The takeaway? Creating truly accurate, enterprise-ready AI tools is tougher than we think.

Sometimes, the future isn't quite as futuristic as advertised!

Read more about it

Some more examples:

• H&M, Coca Cola exploiting AI
• The Beauty Industry Has Reached Peak AI-Washing

How to Spot AI Washing

For those of you who use AI or integrate third-party AI apps into your business, here are some key things to watch out for:

1. Demo Time: Ask for a live demo. Real AI should perform on the spot.
2. Tech Check: Is it custom AI or off-the-shelf? Either's fine, just be clear.
3. Data Matters: Good AI works with your data on your turf. Be wary of unnecessary data transfers.
4. Human Factor: Too much human babysitting? Might not be true AI.
5. Clear Talk: Avoid vague AI buzzwords. Demand specifics.
6. Company Cred: Sudden AI pivot? Red flag.
7. Reality Check: If it sounds too good to be true, it probably is.

Remember, the goal is to find AI solutions that genuinely add value, not just ones that sound impressive in a sales pitch.

Read more on forbes