What is AI washing?
AI washing is marketing or disclosure that overstates, misrepresents or fabricates the role of artificial intelligence in a product — “AI-powered” features that are rules engines or human labour behind the curtain, invented model capabilities, or inflated automation claims. It is not an AI Act concept; the exposure runs through general law: securities and investor-fraud rules (the SEC has brought AI-washing enforcement since 2024), consumer protection and unfair competition (in Türkiye: TKHK and TTK haksız rekabet), and advertising self-regulation.
Where it bites hardest
- Fundraising: pitch decks and information rights materials are fraud-rule territory — the cheapest claim to make and the most expensive to defend;
- M&A and investment documents: “AI capabilities” representations and warranties are now standard — an inflated claim becomes an indemnity event at exit;
- Product marketing: “AI” claims must be substantiated like any performance claim.
Why it matters
The fix is an evidence file: for every public AI claim, keep a one-page substantiation memo (what the model does, metrics, human role). Due diligence teams now ask for exactly this — see our AI due diligence guide.