When reports questioned the “Just Walk Out” technology that many of Amazon’s actual grocery stores had implemented, the company made headlines this year.
At several of its Amazon Fresh and Amazon Go stores, shoppers can pick their items and then leave thanks to the AI-powered system.
To determine what you have selected, the AI consults many sensors. Then, a bill is automatically sent to you.
But in April, it was publicly revealed that Walk Out required almost 1,000 staff in India to manually review nearly 75% of the transactions, as opposed to relying only on AI.
Amazon swiftly refuted the accusations, stating that employees in India were not watching CCTV footage from every store and that they were “erroneous.”Rather, it claimed that the Indian laborers were only going over the system.
Amazon went on to say, “This is no different from any other AI system where human reviewers are common and that places a high value on accuracy.
“Regardless of the specifics of the Amazon case, it serves as a prominent illustration of a recent and expanding inquiry into whether businesses are exaggerating the extent of their usage of artificial intelligence. Referred described as “AI washing” with the environmental phenomena known as “greenwashing,”
Let’s review the definition of artificial intelligence first. AI, which defies precise definition, enables computers to learn and solve issues. AI can accomplish this after undergoing extensive training on vast volumes of data.
The particular subset of AI known as “generative AI” has garnered a lot of attention in recent years. This AI is skilled at developing original content, such as text chats, graphics, or music.
Popular instances of generative AI are chatbots like Microsoft’s Copilot, Google’s Gemini, and ChatGPT.
Artificial intelligence washing comes in various forms. While some organizations misrepresent the effectiveness of their AI over previous techniques or suggest that their AI solutions are fully operational when they are not, others make false claims about the use of AI while actually using less sophisticated computation.
Some companies, meanwhile, are just adding an AI chatbot to their already-existing operational software that doesn’t use AI.OpenOcean, an investment fund for early-stage internet companies located in Finland and the UK, reports that whereas just 10% of tech start-ups in 2022 acknowledged employing AI in their pitches, this number increased to more than a quarter in 2023. This year, it anticipates that percentage to exceed one-third.
Furthermore, some of these businesses have overstated their AI capabilities due to financing competition and a desire to look innovative, according to Sri Ayangar, a member of the OpenOcean team.
“Some founders seem to believe that if they don’t mention AI in their pitch, this may put them at a disadvantage, regardless of the role it plays in their solution,” adds Ayangar.
“And from our analysis, a significant disparity exists between companies claiming AI capabilities, and those demonstrating tangible AI-driven results.”
Based on statistics from another tech investment firm, MMC Ventures, it’s a problem that has been going on for a while.
According to a 2019 survey, 40% of brand-new digital companies that referred to themselves as “AI start-ups” really employed almost no AI at all.
“Today’s problem is the same problem plus a new one,” explains MMC Ventures general partner Simon Menashy.
He said that every business may now purchase “cutting-edge AI capabilities” for the same price as regular software. Nonetheless, he claims that many businesses are just adding a chatbot interface to a non-AI product rather than developing an entire AI system.
According to Douglas Dick, UK director of emerging technology risk at global accounting firm KPMG, the lack of a single, accepted definition of AI exacerbates the issue of AI washing.
“Everyone in the room would have a different definition of artificial intelligence,” he claims. “The phrase lacks a clear point of reference and is used very loosely and broadly. This vagueness is what’s enabling the emergence of AI washing.
“AI washing can have concerning impacts for businesses, from overpaying for technology and services to failing to meet operational objectives the AI was expected to help them achieve.”Investors may find it more difficult to recognize truly innovative companies as a result.
And according to Mr. Ayangar: “If consumers have unmet expectations from products that claim to offer advanced AI-driven solutions, this can erode trust in start-ups that are doing genuinely ground-breaking work.”At least in the US, regulators are beginning to pay attention. The US Securities and Exchange Commission (SEC) said earlier this year that it was bringing charges against two investment advising firms for making false and deceptive claims regarding the scope of their usage of artificial intelligence.
According to Nick White, partner at international law firm Charles Russell Speechlys, “the firm stance taken by the SEC demonstrates a lack of leeway when it comes to AI washing, indicating that, at least in the US, we can expect more fines and sanctions down the line for those who violate the regulations.”
The Advertising Standards Authority’s (ASA) code of conduct, which stipulates that marketing materials must deliberately mislead or be likely to do so, is one of the laws and regulations that address AI washing that are now in effect in the UK.
The regulatory team associate at Walker Morris, a UK business law company, Michael Cordeaux, notes that AI claims are becoming more and more prevalent in ads that are being looked into by the ASA.
A paid Instagram post with the title “Enhance your Photos with AI” is one example of a misleading advertisement, according to the ASA, that overstates the capabilities of the program.
“What is clear is that AI claims are becoming increasingly prevalent and, presumably, effective at piquing consumer interest,” says Cordeaux.
According to Sandra Wachter, an esteemed global authority in artificial intelligence and an Oxford University professor of technology and regulation, “I think we are at the peak of the AI hype cycle.”
But I think we’ve failed to consider whether using AI for every work is necessarily a good idea. I recall seeing advertising for AI-powered electric toothbrushes in the London Tube. For whom is this intended? Who does this benefit?”
“She adds that the effects of AI on the environment are frequently downplayed.”Artificial intelligence does not grow on trees… Already, technology has a greater impact on climate change than airplanes. We need to stop talking about this one-sided, overly dramatic debate and start considering the particular industries and jobs that AI can help with, rather than just putting it into everything.
However, Advika Jalan, head of research at MMC Ventures, believes that AI washing may eventually go away on its own.
“AI is becoming so ubiquitous – even if they’re just ChatGPT wrappers – that ‘AI-powered’ as a branding tool will likely cease to be a differentiator after some time,” she asserts. “It will be a bit like saying ‘we’re on the internet’.”
