AI washing - what you need to know about the new advertising scam

AI washing - what you need to know about the new advertising scam

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May 2, 2024

AI washing - what you need to know about the new advertising scam

In a world in which technological progress is advancing inexorably Artificial intelligence (AI) has become a ubiquitous term. From household appliances to software solutions - AI seems to have found its place everywhere. But how much truth is behind the promises made by providers? This article sheds light on the phenomenon of AI washing and gives you tips on how to distinguish substantial innovation from mere marketing.

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AI washing - what you need to know about the new advertising scam

AI washing: a term is doing the rounds

Similar to greenwashing in environmental technology or pinkwashing in the product world, AI washing stands for the practice of falsely labeling products or services with the label "artificial intelligence", even though they are not. contain little or no real AI technology. A recent example of this is the indictment of two consulting firms by the US Securities and Exchange Commission (SEC), which had advertised with false claims about the use of AI.

The SEC's indictment

In the USA, the SEC has sent a clear signal by taking action against two investment advisory firms that misleading information on the use of artificial intelligence in their products and services. The companies claimed that advanced AI algorithms would guide their investment strategies, but this could not be proven in reality.
This indictment illustrates the increasing willingness of regulators to take action against the inappropriate use of the AI label. The companies had to Fines in the amounts of 225,000 and 175,000 US dollars, an amount intended as a warning to other companies that may be considering making similar unsubstantiated claims.

What companies can learn from this

For companies in the AI sector, it is crucial to recognize the boundaries between ambitious marketing and misleading advertising. The development and implementation of true AI requires not only significant financial investment, but also clear communication about the capabilities and limitations of the technology. Companies investing in AI need to ensure that they: 

  • Provide transparent information: 
    It should be clearly communicated how and where AI technology is used.
  • Comply with ethical standards:
    The use of AI must comply with ethical guidelines that avoid prejudice and ensure data protection.
  • Provide verifiable results:
    Companies should be prepared to prove the effectiveness of their AI systems through tests and studies. 

What counts as genuine artificial intelligence?

The boundaries of what is considered artificial intelligence are fluid and vary depending on the definition. While generative AI systems such as GPT from OpenAI or image generation tools such as Dall-E are based on complex machine learning models and require extensive training data, so-called weak AI is limited to specific tasks such as that of a virtual assistant. The Development effort and the costs of real AI are enormous, which makes the use of advanced AI technologies mostly large companies is reserved.

Ethics and responsibility in dealing with AI 

In addition to the technical aspect, the Ethical responsibility play a crucial role in dealing with AI technologies. Companies that offer genuine AI solutions face the challenge of using these technologies responsibly while ensuring data protection, transparency and fairness. Ethics in AI goes beyond pure functionality and concerns issues of freedom from prejudice, social impact and the safety of AI systems.

How to recognize real AI

To avoid falling for AI-washing, you should pay attention to the following indicators: 

  • Details on the technology:
    Real AI providers can provide specific information about how their technology works and how it is used. 
  • Possibility to test:
    Reputable providers of AI products allow interested parties to test their technology and convince themselves of its functionality.
  • Transparency about the benefits:
    It should be clear what specific advantage the AI offers and to what extent it improves the product or service.
  • value even without AI:
    Products that only appear interesting because of the AI label should be critically scrutinized. Genuine added value should also exist independently of the AI claim. 


AI washing - what you need to know about the new advertising scam


Looking to the future: AI trends and their authentic implementation

AI technology is developing at a rapid pace. Current trends such as the increased focus on federated learning (in federated learning, models are trained simultaneously on multiple devices. This is done in a decentralized manner and without any disclosure or exchange of sensitive information. This means that the relevant data remains with the respective owners at all times), where the focus is on data security and data protection, or the increase in AI-supported healthcare technologies, show how important it is to differentiate between genuine and artificial AI innovations.

AI in healthcare technology: revolution with caution

The healthcare sector is on the cusp of a revolution, driven by the use of artificial intelligence. From the Early detection from diseases and personalized medicine to the optimization of treatment pathways - the possibilities are as promising as they are challenging. One example of this is the development of AI systems that support radiologists in the diagnosis of imaging data. These systems can recognize patterns that are difficult for the human eye to identify and thus contribute to the early detection of diseases such as cancer.

Challenges and ethical considerations

However, the implementation of AI in healthcare also raises questions regarding Privacy, Security and ethical responsibility on. The processing of sensitive health data requires the highest security standards in order to protect patient information. AI systems must also be free of bias in order to ensure equal treatment for all patients.

The importance of transparent AI innovations in the healthcare sector

It is crucial for healthcare technology companies that develop AI solutions, Transparency The aim is to ensure that the algorithms and the data on which they have been trained function properly. An open dialog with regulatory authorities, medical professionals and the public is essential to create trust in these technologies.

AI-supported health technologies

Future developments in AI-supported healthcare technology promise not only improved Diagnosis and treatment methodsbut also more comprehensive and personalized patient care. For example, AI-based mobile applications could help patients to monitor their health and take preventive measures. This underlines the potential of AI to serve not only as a tool to fight disease, but also to promote a holistic understanding of health.

AI washing - what you need to know about the new advertising scam


In the wake of the rapid advance of artificial intelligence (AI) into almost all areas of life, it is crucial to distinguish genuine technological advances from mere marketing, known as AI-washing. The incidents uncovered by the SEC underscore the importance of Transparency, Honesty and ethical behavior in Dealing with AI technologies. Companies are required to invest in real AI and communicate clearly about its application and limitations, while ethical standards and data protection must be prioritized.

Developments in areas such as federated learning and AI-powered healthcare technology point to the immense potential of AI to have a positive impact on people's lives. However, this potential can only be fully realized if innovations are based on sound, ethical principles. The responsibility for this lies not only with companies, but also with consumers and regulators, who must foster an environment that encourages genuine AI innovation while maintaining the integrity of technological progress. Critical awareness and the demand for transparency are essential. Would you also like to Artificial intelligence (AI) into your company? Then we would be happy to support you.


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