Talking around the generation AI has reached a heat pitch over the past few years. This is the extent to which it is effectively death to say they are not investing on a large scale in Gen AI to transform their business. There’s only one problem. Many companies are misleading or lying about the extent to which they use such technology and the extent to which they can. This not only exposes these companies to the risk of litigation and regulatory scrutiny, but also unnecessarily increases compliance costs by providing assurances to risks that neither the organization nor its technology actually poses.
This trend, known as “AI laundry,” describes deceptive marketing tactics that give the impression that companies can exaggerate or manufacture the development or implementation of AI solutions, and change their business for the better with technology alone. It has been going on for years. In a 2019 survey by investment firm MMC Ventures, 40% of new European high-tech companies who described them as “AI startups” actually used virtually no AI. It was a pure marketing pitch that helped raise investment capital. And it works.
According to Elika Dadsetan, CEO/Executive Director of Business Transformation Consultancy Visions, AI Laundry “thrives in a climate where technology is high, low understanding is low and far behind innovation.”
