Allocators: Don’t Rely on Regulators to Unmask AI Washing
In 2020, I wrote an op-ed for the Financial Times that pointed out how investment managers, eager to capitalize on the buzz swirling around AI, exaggerated or misrepresented their use of the technology to make their offerings appear more advanced and innovative than they actually were.
Now the deceptive marketing tactic even has a name: AI washing. Investment managers aren’t the only ones to engage in such tactics. Companies, including Coca-Cola, Pepsi, McDonald’s, and H&M, have been widely criticized for boasting about their use of AI in their marketing to position their products as innovative and futuristic — without providing transparency into the specific AI capabilities behind their efforts.
AI does add a certain sheen — at least to the words. Just read a press release for Coca‑Cola Y3000 Zero Sugar: The company invites “fans to imagine what the future tastes and feels like with a limited-edition drink and new AI-powered experience.” But the release didn’t give any details about the AI or the role AI played in the product’s creation.
The United States consumer protection agency, the Federal Trade Commission, has made AI washing a priority, warning companies across the economy that “if you think you can get away with baseless claims that your product is AI-enabled, think again. … Before labeling your product as AI-powered, note also that merely using an AI tool in the development process is not the same as a product having AI in it.”
