Legal Team Strategies for Avoiding AI Washing

A LexisNexis blog post reports that the past year has marked significant advances in generative artificial intelligence technology while introducing the concept of AI washing, a term describing false or misleading claims about AI use. 

Akin to greenwashing, AI washing involves overstating or fabricating AI capabilities to enhance brand image or attract investment. According to London-based venture capital firm MMC, startups mentioning AI receive 15 to 50 percent more investment, driving some companies to exaggerate their AI integration. 

However, the lack of standardized definitions of AI makes it difficult to differentiate between marketing hype and intentionally misleading claims. For instance, the BBC highlights that some companies might claim to use AI when they’re actually relying on less advanced computing. Others may exaggerate the effectiveness of their AI or imply that their AI solutions are fully functional when they are not.

Engaging in AI washing exposes companies to significant risks, including legal liability and reputational harm that can undermine customer trust and potential investor concerns. This growing focus on AI transparency highlights the need for companies to ensure that their AI claims are accurate and backed by evidence. 

Experts recommend strategies to mitigate AI washing risks, including reviewing public statements to verify AI claims and collaborating with technical teams to understand actual AI capabilities. Developing internal AI guidelines that cover transparency, bias, and privacy are “must-haves.” Regular audits and monitoring of emerging regulations further ensure compliance, while employee training on ethics and the risks of AI washing helps foster accountability.