‘AI washing’: What is it and why regulators are on watch

AI globe

Federal agencies, including the Securities and Exchange Commission (SEC), Department of Justice (DOJ), and Federal Trade Commission (FTC), are taking every opportunity to warn firms that how they use—and represent their use of—artificial intelligence (AI) could result in violations.

“AI washing” has become a popular way to describe a firm or company making exaggerated claims about what its AI can do in order to boost profits and lure investors.

“Fraud is fraud, and bad actors have a new tool, AI, to exploit the public,” said SEC Chair Gary Gensler in remarks delivered at Yale Law School on Feb. 13.

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