This article originally appeared in the July/August issue of Startups Magazine. Click here to subscribe

Now, with a variety of free and subscription-based tools, GenAI is available to all and it’s becoming widely integrated into many different types of businesses – from startups to larger companies – in order to improve productivity, efficiency and ultimately, growth. This rapid adoption of new technology brings a wealth of opportunities, but also a minefield of considerations for companies – including not only how businesses decide to use GenAI but also how they communicate its integration and impact to both internal and external audiences.

What is AI-washing?

Earlier this year in the US, the Securities & Exchange Commission’s Chair, Gary Gensler, warned about ‘AI-washing’ where companies ‘make false or misleading claims’ related to their AI use, and recently, the SEC settled charges against a pair of investment advisors found to be doing just that.

If companies are beginning to exaggerate or overclaim AI capabilities, this general direction of play could be attributed in part to a ‘trickle down’ effect from some of the kingpins of mainstream GenAI. Both ChatGPT’s CEO, Sam Altman and CTO, Mira Murati, have been accused by some journalists and industry experts for speaking about the tech in a ‘vague’ and sometimes ‘overstated manner’, referring to what it will do ‘eventually’ and ‘in the future’, rather than right now. If ChatGPT’s top team has a propensity to speculate about the possibilities, this normalises the discourse for the rest of us.

It’s important to note however, that most businesses who have begun to integrate this technology and talk about how they’re doing so, most[1]likely don’t have any intention of making ‘false or misleading claims.’ Nevertheless, the signs are there that ‘AI-washing’ could become more prevalent unless the issue is addressed head-on.

Why startups might AI-wash without meaning to

Much like ‘greenwashing’ before it, ‘AI-washing’ is most likely fuelled by the desire to position a business in a positive light – to investors, stakeholders, competitors, and customers – as well as driven by concerns of being labelled as ‘lagging behind’ if a company fails to conform to certain standards. This pressure can sometimes lead to marketing and messaging choices which result in misunderstanding and miscommunication.

In some cases, as the tech is relatively new and available to all, businesses may not even have a totally clear picture of the extent to which it is being used by staff. In the past, companies like Apple ended up banning their employees from using ChatGPT while concerns such as safety and security were addressed. This issue can be resolved in part by organisations formalising usage – either purchasing or developing bespoke tools for specific needs, training staff, and putting in place some general guidelines.

For startups and fast-growing companies, it could be argued that this pressure to be seen as ‘innovative’ while rapidly scaling the business, is often a very real factor. It may prompt, for example, a company to communicate its AI adoption and usage before it is fully ready to do so, or before messaging has been aligned across the team. And as we know, once a story is out in the wider world, the media and audiences can be unforgiving if a brand has been caught exaggerating the capabilities of a product or service. From this, serious reputational damage can occur and make a dent in customer trust, even if the business in question had no underlying intention to purposely mislead.

How can companies guard against AI-washing

For startups that have already established GenAI as a fundamental part of their business and are keen to talk about its benefits, transparent and ethical communication should be encouraged at all times about how the tech is being used exactly in the here and now, both internally and externally, to build trust. This includes avoiding vague claims that could be misinterpreted and being open about any shortcomings or limitations.

To achieve this, company departments and experts must work even more closely together – e.g. tech and marketing functions – to ensure claims and messages are clearly defined and based on evidence, including data and insight, as well as third party audits where it is relevant to validate AI capabilities and results. For startups, this will be a balance between being bold in both experimentation with AI technology and communicating about how it’s being used to improve business efficiency, output and growth, combined with a degree of caution and restraint to ensure messaging is robust and can be backed-up with proof points before speaking publicly.

There’s no doubt that GenAI offers unprecedented opportunities to improve businesses and industries for the benefit of all – the possibilities are truly exciting and I know I’m not the only one who is fascinated to see where it will take us. ‘AI-washing’ is an area that will merit ongoing scrutiny and discussion to ensure progress isn’t hindered. Collectively, it’s our responsibility to communicate advances and achievements with honesty and integrity.