AI washing

Making a product, service, or company sound more advanced by exaggerating how much it uses artificial intelligence (AI), or what that AI can do.

For example, a company might advertise "AI-driven" decisions that are really made by people or simple formulas, or claim its AI can do a job it has never been tested on.

False or misleading statements about AI use, capability, or results, made to customers, investors, or regulators. The term borrows from "greenwashing," which describes overstated environmental claims. Regulators generally act on AI washing under existing laws against false advertising and misleading statements to investors.

AI washing usually takes one of several forms:

• Claiming AI that does not exist, such as calling a manual or rules-based process AI-powered.
• Overstating capability, such as claiming a tool can replace expert judgment without testing it.
• Hiding human work, where people perform tasks the product says it automates.

Regulators in several countries have acted on it:

• Securities regulators, which police claims made to investors. In March 2024, the US Securities and Exchange Commission (SEC) settled charges against two investment advisers, Delphia and Global Predictions, over false AI claims, with $400,000 in combined penalties. In November 2024, the Canadian Securities Administrators (CSA) reported finding AI washing in company disclosures and prospectus filings.
• Consumer protection agencies, which police claims made to the public. In September 2024, the US Federal Trade Commission (FTC) announced Operation AI Comply, five enforcement actions against companies using AI claims to deceive consumers.

AI washing sits next to terms that are easy to mix up:

• Agent washing is the narrower version, where a product is falsely presented as an autonomous AI agent.
• Generative AI fraud is fraud committed with AI tools, while AI washing is a false claim about AI itself.

For more, see the SEC announcement on Delphia and Global Predictions and the FTC announcement on Operation AI Comply.