AI Washing

AI hype and reality is something we need to look at more carefully. Back in 1770, there was this Hungarian guy Von Kemplin who made a "chess-playing machine" that was actually just a human hiding inside. Fast forward to 2016, and Amazon did something similar with their "Just Walk Out" technology - they advertised it as pure AI but actually had 1000 people in India manually reviewing 70% of transactions. This isn't just about Amazon - according to Goldman Sachs, 36% of S&P 500 companies are now talking about AI in their reports, and global AI investments have gone up 7 times from 2015 to 2022.

But here's the thing - lots of companies are doing "AI washing" - just throwing the AI label on things to create hype. Like this Canadian investment firm Delia that claimed they had AI to predict market trends but got caught by SEC and had to pay $225,000 for lying. Even big tech layoffs might be secretly AI-related - companies laid off 165,000 people in 2022, 260,000 in 2023, and more in 2024, while making record profits. Instead of three people doing work of three, now one person with AI does work of five.

The Software-as-a-Service (SaaS) industry is facing a major growth crisis, and companies are desperately turning to AI as their potential savior. These companies, which make money by charging monthly subscriptions for cloud-based software, are seeing declining growth rates and struggling to retain customers at previous levels. In response, they're hastily adding AI features to their products - mostly in the form of basic chatbots and summarization tools - and charging premium prices for them. However, this strategy appears to be backfiring. The AI features are expensive to run (often losing money per user), don't provide much real value, and customers aren't buying them at the hoped-for rates. Even Microsoft's Copilot, despite its marketing push, has only converted 0.1-1% of Microsoft 365 users. This raises serious concerns about the sustainability of both the SaaS business model and the current AI boom, as companies may have locked themselves into providing expensive AI features that customers don't particularly want or need.

Real AI progress is happening for sure, but we need to be real about what AI can and can't do right now. McKinsey says about 12 million US workers might need new jobs by 2030 because of AI. Lower-wage workers are 14 times more likely to be affected. This isn't about saying AI is fake - it's about being honest about where we really are with the technology and not just believing every "powered by AI" label we see.

That's the real meaning of progress - being truthful about both the good and bad, and making sure innovations actually help make life better, not just create hype.