Securities and Exchange Commission Chair Gary Gensler has warned businesses against “AI washing,” or making false artificial intelligence-related claims, likening it to the greenwashing phenomenon that has been the target of an agency crackdown, the Wall Street Journal reported. Gensler said yesterday that securities laws bar phony claims and require companies to give “full, fair and truthful” disclosures. “Don’t do it,” Gensler said at a conference hosted by The Messenger, a news outlet. “One shouldn’t greenwash and one shouldn’t AI wash.” “AI washing” has emerged as an informal term that describes businesses’ making unfounded AI claims to the public, akin to greenwashing, which refers to companies making unfounded representations about environmental sustainability. The explosive growth in the number and sophistication of AI applications has led to concerns that marketing claims might not match what companies are delivering. The Federal Trade Commission in February warned companies across the economy that it would be on the lookout for bogus AI claims in advertising, from exaggerations of AI-powered products’ capabilities to outright fabrications that a product incorporates AI technology.
