Context:

Recently, companies have been highly engaging in Artificial Intelligence (AI) Washing to attract more consumers and investors.

About AI washing 

• It is a deceptive promotional practice that exaggerates or outright lies about a product or service’s use of artificial intelligence (AI).
• Companies often claim to utilize advanced AI algorithms like deep learning or machine learning, but in reality, their systems rely on simpler rule-based automation or pre-programmed responses for operation.
  AI enables computers to learn and solve problems after first being trained on huge amounts of information.
• In AI washing (which is a term derived from greenwashing) companies misleadingly label their products or services as powered by AI or using Artificial Intelligence.
• While it is unclear who coined the term AI washing, it was popularised by the US Securities and Exchange Commission (SEC) when it levied fines worth $225,000 (Rs 1.8 crore) and $175,000 (Rs 1.4 crore) against investment advisory firms Global Predictions and Delphia. 

Why Do Companies Engage in AI Washing?

Companies that want to associate artificial intelligence with their brand may engage in AI washing to:

• Increase consumer and investor interest.
• Increase brand value.  
• Inflate the perceived value of a product/service.
• Stay competitive in a fast-moving market.
• Create the perception they are more advanced than a specific competitor.

Why AI Washing is problematic?

• It hurts the reputation of AI, hinders genuine progress, and shortchanges consumers and businesses.
• When companies overhype their AI capabilities and fail to meet expectations, creates a sense of disappointment and skepticism within the AI industry.
• It diverts management attention and resources away from practical AI innovation.