AI Washing & Its Implications For Startups & Established Businesses.

Today I discovered a new phrase that in some ways is emblematic of any ‘new new thing’ when there is a seismic shift in technology as we know it. That phrase is ‘AI washing’. I spontaneously laughed when I heard it since it’s so apt given what is happening in the world at the minute where Generative AI has become front and center of everything as we know it.

AI, or more specifically, Generative AI has undoubtedly become the ‘new new thing’ of all things since the advent of ChatGPT in November 2022. ChatGPT crystallized a new era of accelerated computing enabled by large language models or LLMs running on super powerful graphics processing units or GPUs from companies like NVIDIA.

Since then, every business of note in pretty much every sector and industry globally has turned its gaze to all things Generative AI given its enormous and often controversial potential to upend the status quo in massively disruptive ways. The future of work, as we know it, is being rewritten in real time and industries are being digitally transformed at scale daily. Therefore, the allure and temptation for any established business as well as the newly minted startup is to ‘slap on’ an AI moniker to their brand and offerings as a way of increasing their market visibility, valuation, and ‘instant coolness factor’ in the process.

It seems to me that the lessons of the not-so-distant past during the now infamous ‘dotcom boom and bust’ have already been forgotten. During the dot-com boom, going back 25 years or so, numerous startups and established businesses joined the ‘new economy’ made possible by the Internet. The thinking was, for as long as your business model could disrupt the incumbents of the ‘old economy’ such as large brick-and-mortar retailers, you could have an Initial Public Offering or IPO and be worth millions of dollars, quite literally overnight.

Indeed, fortunes were made on the back of even the most dubious and quite frankly hilarious business ideas that got funded and raced to have an IPO, leading to ‘the bubble’. As the dot-com boom inflated and the ‘new economy’ literally exploded, the bubble burst as reality checked in and millions of individual investors as well as large institutional investors found themselves owning worthless shares, hence the dot-com bust!

Going forward, as AI washing becomes a thing, I can’t help but notice the emerging parallels between the dotcom boom and the bubble that is forming as Generative AI becomes all the rage for startups and established businesses globally. Amazing Generative AI cannot solve the fundamental problem of businesses that are NOT AI-driven at the core. Therefore, even if they claim to be AI-enabled, they could fail spectacularly since no amount of AI washing can transform a fundamentally normal and staid business.

However, rather than seeing Generative AI as a fad, as many thought that the Internet was after the dot-com bust, the transformation it portends for every industry and profession as we know it is very much a real thing. Ignore Generative AI to your peril as an individual or as an organization since the machines are coming for everyone and everything! 🙂

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