AI Washing: Simple Guidance to Avoid Risk


1 minute watch | November.11.2024

What is AI washing? AI washing is when a company overstates the AI capabilities of their products and services to mislead the market. It describes companies that are exploiting the current AI boom and lying about the AI capabilities of their businesses to gain an advantage with investors. The SEC has taken action against companies in the context of AI washing and has confirmed that they continue to be focused on it.

Companies, including startups, therefore should approach any disclosures, advertisements, and public statements with great care and make sure that they accurately describe the business. Companies should make sure their statements are consistent across communications, including investor presentations, but also social media content, YouTube videos and other online statements. So, in a nutshell, make sure that you accurately describe your business and your products and the AI capabilities behind them.