Since November 2022, Artificial Intelligence has been a hot topic. Governments are trying to show they’re up-to-date by using AI tools. Meanwhile, scientists are grappling with the potential impact AI’s explosion might have on everyday life. More and more people rely on AI for everything from schoolwork to presentations and problem-solving. **Companies, too, are jumping on the AI bandwagon to market themselves better, attract clients, and secure new funding.** However, this has led to a phenomenon known as **AI washing.**
To understand what this is, **Emmanuel Iarussi**, a Conicet researcher at the AI Laboratory of Torcuato Di Tella University, defines it as: “**Exaggerating or falsely claiming the use of artificial intelligence algorithms in a company’s products or services.**” This makes them appear more innovative and advanced than they actually are. Essentially, consumers and investors are misled regarding a company’s true capabilities.
The term “AI laundering” comes from the comparison with **”greenwashing”**, **where companies deceptively promote their products as environmentally friendly** to attract customers and increase profits. This creates a false sense of ecological responsibility.
“Smart” Products?
Companies are incorporating AI into their products and services to stand out. Many CEOs are simply interested in the **”AI seal of approval,”** without fully understanding the technology’s inner workings. They present themselves as innovative options, using AI as a guarantee of trust.
**Ana Maria Vara**, a researcher at the Human Sciences Research Laboratory of the National University of San Martín, told **Page 12**: “**For companies, exaggerating the capabilities of any technology is helpful for charging higher prices. They can sell their products for more because they’re linked to AI.**” She continues, “Associating advanced scientific or technological developments with a product is often a sales tactic. I remember, as a child, there was a washing powder with enzymes, represented in animations based on bugs eating dirt. They used science to showcase a novel product different from others on the market.” Vara believes that AI discourse is infused with potential, both optimistically and pessimistically, but it holds immense power. “**A power that surpasses our imagination,”** she adds.
The real issue is understanding how companies incorporate and sell technology. According to Iarussi, there are several strategies, **from labels like ‘Powered by AI’ to media advertisements using technical jargon to make products seem more advanced than they are.** **Another common tactic is to label something as ‘Smart,’ without elaborating on what aspects are smart or how they achieve this.** Iarussi shares a curious fact, “There are products that have incorporated AI algorithms for years, like robot vacuum cleaners, but their manufacturers didn’t usually leverage it as a marketing tool.”
Innovations that Don’t Innovate
While products may appear shiny, they often lack substance. Firms capitalize on this situation and oversell their capabilities. **Fernando Schapachnik**, executive director of the Manuel Sadosky Foundation, reflects on this phenomenon. “AI washing generally occurs in two ways: **On one hand, there’s the ‘technological hype,’** where products are advertised as having AI, but behind the scenes, 800 employees in a developing country manually make decisions. **On the other hand, we see products using GPT Chat or similar technologies, thinly veiled with superficial marketing.”**
Companies, in their quest to stay current, **incorporate AI systems without understanding the underlying algorithm or data source.** As a result, they may not be truly integrating the latest technology, but rather mimicking existing ones. Not all models are equal.
Essentially, the exponential growth of machine learning tools has led to new scams and frauds. In some cases, as Schapachnik pointed out, services are marketed as “cutting-edge AI,” when they’re actually using nothing more than the well-known GPT Chat. Iarussi describes this as “GPT Chat-wrappers,” **software that offers seemingly advanced services, but are merely simple calls to ChatGPT.** “In these cases, AI is involved, but there’s only a basic level of personalization incorporated on top of OpenAI’s platform.” He provides an example: “An application may present itself as a sophisticated customer service assistant, when in reality, it simply redirects user questions to ChatGPT without adding any real value or business-specific functionalities.”
With Wide Open Eyes
The **United States Securities and Exchange Committee** recently fined two firms for money laundering due to deceptive marketing regarding AI-powered software. **Like any new technology, AI is underregulated. In deregulated capitalism, innovation comes first, and regulation follows, neglecting the precautionary principle in terms of social impact.** Companies have been penalized for promoting AI when they’re not using it, which reflects the US’s interest in regulating by expanding existing legislation,” explains Vara.
From Elon Musk, Sam Altman, and Bill Gates, to heads of state like Javier Milei, everyone is trying to capitalize on the AI wave. Technological advancement seems to be solidifying in this direction in the 21st century. However, regulation will be slower to respond because you can’t regulate what you don’t understand. Even though everyone knows GPT Chat, understanding how algorithms work and AI thinks isn’t something learned through a TED talk or YouTube video. Therefore, a greater citizen understanding of new technologies is necessary to comprehend their inner workings and potential effects.
Active citizenship and support for training human resources is crucial. “In any case, **we’re witnessing the proliferation of advanced computer products. It’s important to acknowledge this because people’s training has to keep pace. This means preparing ourselves as a country.** Any development has a glamorous side and a less glamorous side, linked to the groundwork, the daily work done by IT professionals. **We need more people to pursue these careers if we want to face the AI challenge. In this sense, supporting universities is essential,”** emphasizes Schapachnik.
AI Washing: The Rise of Deceptive Marketing in the Age of Artificial Intelligence
Since November 2022, Artificial Intelligence (AI) has taken center stage, captivating the world’s attention. Governments are scrambling to embrace AI tools, demonstrating their technological prowess in the current landscape. Scientists grapple with the profound implications AI’s rapid advancement might have on everyday life. Meanwhile, citizens increasingly rely on various AI forms, seeking answers to everything from school assignments and work presentations to complex problems. Amidst this AI frenzy, companies are jumping on the bandwagon, using the allure of AI to market themselves more effectively, attract clients, and secure new funding. This has led to a phenomenon known as **AI washing or AI laundering.**
Defining AI Washing
To understand this deceptive practice, Conicet researcher Emmanuel Iarussi, from the AI Laboratory of Torcuato Di Tella University, offers a concise definition: **”AI washing involves exaggerating or falsifying the use of artificial intelligence algorithms in a company’s products or services.”** By portraying themselves as more innovative and advanced than they truly are, companies mislead consumers and investors regarding their capabilities.
The Roots of AI Washing: A Comparison to Greenwashing
The term “AI laundering” draws a parallel with **”greenwashing,”** a deceptive practice where companies falsely claim their products are environmentally friendly, often to attract environmentally conscious consumers. Just as “greenwashing” creates an illusion of ecological responsibility, **AI washing presents a deceptive facade of technological advancement.**
“Smart” Products: The Appeal of AI Labels
Companies are eager to incorporate AI into their products and services, setting themselves apart from their competitors. This pursuit of the **”AI quality seal”** often overshadows a deeper understanding of how these technologies actually work. CEOs prioritize the label itself, aiming to position their brands as innovative and trustworthy through AI association.
Ana Maria Vara, a researcher at the Human Sciences Research Laboratory of the National University of San Martín, highlights the financial motivations behind this trend. She states, **”For companies, exaggerating the capabilities of any technology is highly functional to achieving a higher price. They can sell their products more expensively because they are associated with AI.”** Vara also draws a connection to past marketing strategies, asserting: “Associating advanced scientific or technological developments with a product is often a selling point. For example, a washing powder I used as a child featured enzymes, represented in animations with bugs that ate dirt. Science was used to showcase a novel product that was different from others on the market.” This illustrates how AI narratives are imbued with both optimistic and pessimistic potential, but undeniably wielding enormous power, a power “beyond our imagination,” Vara emphasizes.
Marketing Tactics: AI Labels and “Smart” Buzzwords
Companies employ various strategies to create the illusion of AI integration. Iarussi details these methods: **”From labels claiming ‘Powered by AI’ to media advertisements using jargon related to AI technologies,”** the goal is to project an image of advanced products. **Another common tactic involves using the term ‘Smart’ without providing specific details regarding how or where the product’s intelligence lies.**
Iarussi also points to the long-existing use of AI algorithms in products like robot vacuum cleaners, which were not previously leveraged as marketing tools. This further underscores the deliberate nature of AI washing: companies are actively choosing to promote AI capabilities to enhance their brand image and profitability.
Innovations That Don’t Innovate: Exposing the Deception
While products may present a seemingly advanced facade, the reality is often far less impressive. Companies exploit AI washing to oversell capabilities that may not be fully realized. Fernando Schapachnik, executive director of the Manuel Sadosky Foundation, sheds light on the two main forms of AI washing:
1. Technological Hype:
Products are marketed as AI-powered, but the reality is far simpler. Schapachnik explains, “There is what is known as ‘technological hype’, where products are sold as if they had AI, but behind them there are 800 employees in an underdeveloped country making decisions by hand.” This highlights the disconnect between the marketed image and the actual technology employed.
2. Thinly Veiled GPT Chat:
Companies use powerful language models like GPT Chat as the foundation for their products, adding a superficial layer of customization. Schapachnik notes, “On the other hand, we also see products that use GPT Chat or its equivalents, coated with a thin layer of something else.” This practice capitalizes on the advancements of existing AI technologies without significant innovation or unique development.
Lack of Transparency and Data-Driven Decisions
The rush to embrace AI often leads companies to incorporate AI systems without fully understanding the algorithms or data sources. This lack of transparency raises concerns regarding whether companies are truly leveraging cutting-edge technology or merely imitating existing systems. As Schapachnik points out, **”Companies in various fields, in their eagerness to update themselves with the current times, incorporate AI systems without knowing the algorithm or where the data is extracted from.”** This highlights the potential for AI washing to perpetuate misleading narratives regarding technological advancement.
GPT Chat-Wrappers: A Software Industry Trend
The software industry has even coined a term for these deceptively advanced services: **”GPT Chat-wrappers.”** Iarussi explains, “It is software that offers services that seem advanced, but are nothing more than a simple call to ChatGPT.” These wrappers may incorporate a basic level of personalization on top of OpenAI’s platform, but ultimately lack the true depth and value of genuine AI innovation.
An Example of GPT Chat-Wrapper: Customer Service Bots
Iarussi provides a real-world example: **”An application might present itself as an advanced customer service assistant, but in reality, all it does is redirect the user’s questions to ChatGPT without adding real value or additional functionalities specific to the business.”** This illustrates how AI washing can be used to create a false impression of sophisticated customer service, when in reality it relies on pre-existing AI infrastructure.
Global Regulations: A Slow Response to AI Deception
In recent weeks, the United States Securities and Exchange Commission fined two companies for money laundering due to their deceptive marketing regarding AI-powered software. This highlights the growing need for regulation in this emerging field, but the current regulatory landscape is lagging behind. **Companies have been sanctioned for promoting AI usage without delivering on their promises, reflecting the challenges of balancing innovation and oversight in a rapidly evolving technological environment.**
AI: A Growing Challenge for Regulation and Citizen Culture
From Elon Musk and Sam Altman to world leaders like Javier Milei, the global community is embracing the AI wave. Technological advancement in the 21st century is increasingly centered on AI, but regulations struggle to keep pace. We must learn to understand the complexities of AI and its potential impacts, not just through fleeting encounters with technology like TED talks and YouTube videos, but through deeper engagement and education. This requires a strong foundation of citizen culture, which can be fostered through:
1. Active Citizenship:
Engaging with AI advancements and holding companies accountable for their claims, ensuring that AI is used ethically and responsibly.
2. Supporting AI Education:
Investing in training and education programs that equip citizens with the knowledge and skills needed to navigate the ever-changing landscape of AI.
The Need for Trained Professionals: A National Imperative
Schapachnik emphasizes the critical role of human capital in the AI era, stating, **”We are witnessing the multiplication of advanced computer products. It is important to know this because people’s training has to go hand in hand, because this means preparing ourselves as a country.”** He further highlights the need for both glamorous and less-glamorous roles within the AI ecosystem, recognizing the fundamental contributions of IT professionals in driving innovation. “We need more people to study this type of career if the goal is to face the challenge of AI, and in this sense, support for universities is essential.”**
In conclusion, AI washing underlines the need for greater transparency and accountability within the AI landscape. As we navigate this exciting but complex era, it is essential to approach all claims of AI integration with a critical eye, ensuring that technological advancement is driven by genuine innovation and not by deceptive marketing practices. Investing in citizen education, supporting AI training programs, and promoting ethical AI development are crucial steps toward building a future where AI benefits all of society.
