As brands jump on AI bandwagon, regulators respond

source: Google NGram Viewer

Artificial intelligence has arguably existed for decades. But AI’s branding—in addition to the complexity of technologies that fall under its umbrella—has been profoundly dynamic over that same time period. What once “used regression econometrics” is now “AI-powered”: a far more buzzy, and often compelling, turn of phrase. 

The chart above tells one story: the runaway ascendance of “AI-powered” in common parlance, seemingly out of nowhere, even as terms like “artificial intelligence” and “AI” have circulated more consistently, as shown below. (Featuring a strange bump in the late ‘80s. Hmm… something to do with perestroika and glasnost? Email us if you have any theories.) 

source: Google NGram Viewer

The uniquely Moore’s law-esque growth of “AI-powered” as a term belies surging investor interest in—as well as consumer focus on—artificial intelligence. Namely, in the wake of ChatGPT’s introduction to the public, affiliating one’s brand with AI—as least in some companies’ view—bestows a degree of modernity and forward-looking-ness that can offer a leg up over competitors. It speaks volumes, for example, that Coca-Cola sees a need to label itself as AI-powered, not just tech companies. 

Leveraging the generative-AI zeitgeist to grow and sustain attention has generated (ha) a kitchen sink of brands labeling themselves as “AI-powered,” regardless of whether that’s fully true or not—or whether their tools are actually useful or not.

“I think far more companies are marketing the use of AI, how they have a chatbot that’s going to revolutionize their industry, than are truly trying to solve problems,” Ramp CEO Eric Glyman said in a recent Bloomberg Technology interview. 

This trend has birthed the term “AI washing.” Akin to “greenwashing” or “pinkwashing,” this kind of specious marketing bedazzles a service in AI-ish wrapping, without there being much of a there there.

“If you see companies claiming AI but you can’t find real customers behind it, and they’re not talking about how they’re integrating AI into the workflow of their software, it’s probably AI washing,” Glyman concluded. 

And regulators are paying attention to the problem. Just yesterday at a conference hosted by The Messenger, SEC Chair Gary Gensler warned brands: “Don’t do it… One shouldn’t greenwash, and one shouldn’t AI wash.” 

What this warning from the SEC means materially isn’t clear. But the FTC was clearer. In March, FTC Chair Lina Khan suggested that technologies that overinflate the substance or implications of their AI tools could face legal consequences, rhyming with extant false-advertising statutes.

“Developers of these tools can potentially be liable if technologies they are creating are effectively designed to deceive,” she said. 

What effect, if any, will these warnings have on how AI is developed and sold in fintech and beyond? And what’ll happen to the graphs above as we stretch out the X-axis beyond 2023?

While it seems doubtful that warnings about smarmy marketing techniques will make the “AI-powered” linguistic trend line start to head downward, it might decelerate.

The process might clear the air and separate stalwarts from wannabes. It could even make “AI-powered” a uniform term that businesses and consumers can trust.