Not everything branded “powered by AI” today actually uses artificial intelligence in any meaningful way. Recognizing when that happens has a specific name: AI washing.
What it is, in detail
AI washing is a deceptive promotional practice where a company intentionally exaggerates, misrepresents, or outright lies about the real AI capabilities of a product or service. The name echoes “greenwashing” in environmental marketing, for the same reason: a label used to create an impression that doesn’t match reality.
The most common forms
It’s not always an outright false claim. AI washing takes different shapes: from presenting software that just follows simple predefined rules as if it were an “intelligent”, autonomous decision-making system, to attributing a level of automation to AI that in reality still requires heavy human supervision behind the scenes. A more recent variant involves companies citing artificial intelligence as the cause of mass layoffs, when the real reasons are something else entirely (falling revenue, overhiring in previous years, pressure from investors).
Why it’s becoming a regulatory problem
The EU AI Act, the European Union’s regulation governing artificial intelligence, becomes fully applicable for nearly all of its provisions in August 2026, and part of its framework is specifically about transparency around what can legitimately be called an “AI system”. Even outside Europe, some financial market regulators have already sanctioned companies for misleading claims about AI use in their offerings, treating it as a case of deceptive advertising toward consumers and investors.
How to spot it
A good warning sign is vagueness: when a product describes itself as “AI-powered” without ever explaining what that AI actually does, what kind of model it uses, or what decisions it makes autonomously, some skepticism is warranted. Companies that genuinely use AI in a meaningful way usually have no trouble being specific about it.