AI Washing
Working knowledgeGovernance, Safety and Ethics
AI washing is the deceptive practice of exaggerating, misrepresenting or falsely claiming that artificial intelligence is used within a company's products, services or internal operations. The motive is normally to inflate enterprise valuation and attract investment capital. The exposure is regulatory scrutiny, enforcement action from securities regulators, and post-acquisition valuation write-downs.
In practice
This is the first red flag to test when verifying a target's technology claims. Set the AI claims in the marketing against R&D expenditure, engineering headcount and what the code actually calls at runtime. A target claiming a proprietary model while paying a per-token bill to somebody else's API has answered the question.