AI Washing happens when companies exaggerate or even invent their use of AI to make products or services appear smarter and more innovative than they really are. It is a marketing trick designed to attract customers and investors who are eager to bet on the booming AI industry.

The U.S. Securities and Exchange Commission (SEC) has recently taken action against several firms accused of AI Washing. Some claimed their platforms were powered by advanced AI, but investigations showed little to no real AI involved. Such practices mislead investors and can amount to violations of securities law.

Just like “Greenwashing” in the environmental sector, AI Washing reflects a growing risk in today’s tech-driven economy. For businesses, it may provide short-term hype, but for consumers and investors, it raises serious concerns about trust, transparency, and the real value behind AI claims.

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