AI-washing: the legal, reputational and commercial risks of jumping on the AI bandwagon
30 June 2025
James Clark, Data Protection, AI and Digital Regulation, partner at Spencer West LLP
Artificial intelligence (AI) has captured the world’s attention in recent years, and the IT network sector is no exception. With transformative potential for automation, predictive maintenance, network security, and more, AI promises much. As such, it has become a beacon for investment, and a watchword for companies when procuring all forms of technology services.
However, an emerging trend — often labeled as ‘AI-washing’ - has seen companies embellish or outright misrepresent their products as ‘AI-enabled’ or ‘featuring AI’ when, in reality, the underlying technology may not be all that smart - and something that, until very recently, would not have been badged as AI. This practice, reminiscent of greenwashing in an environmental context, is not harmless, and can have significant legal, reputational, and commercial consequences for companies operating in an increasingly competitive marketplace.
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