Gary Gensler cautions businesses against peddling phony AI-related hype

  • SEC Chair Gary Gensler warns against ‘AI washing’
  • AI washing is making false AI-related claims
  • Similar to greenwashing, which is making false environmental sustainability claims
  • Securities laws require companies to provide truthful disclosures
  • FTC also cracking down on bogus AI claims in advertising
  • SEC previously raised AI-washing issue with compliance lawyers

Securities and Exchange Commission Chair Gary Gensler has warned businesses against ‘AI washing,’ or making false artificial intelligence-related claims, likening it to the greenwashing phenomenon that has been the target of an agency crackdown. Gensler emphasized that securities laws require companies to provide ‘full, fair and truthful’ disclosures and urged businesses not to engage in AI washing. The Federal Trade Commission has also issued warnings about bogus AI claims in advertising. The SEC has previously raised the AI-washing issue with compliance lawyers and is looking into instances where companies are falsely claiming to use AI technology.

Factuality Level: 8
Factuality Justification: The article provides information about Gary Gensler, chair of the Securities and Exchange Commission, warning against ‘AI washing’ and making false AI-related claims. It explains the concept of ‘AI washing’ and compares it to greenwashing. The article also mentions the Federal Trade Commission’s warning about bogus AI claims and the SEC’s crackdown on greenwashing. However, the article lacks specific examples or evidence of companies engaging in AI washing, and it does not provide any further details on the SEC’s areas of focus or actions taken against AI washing.
Noise Level: 7
Noise Justification: The article provides some information about the Securities and Exchange Commission Chair Gary Gensler warning against ‘AI washing’ and making false AI-related claims. However, the article lacks depth and analysis on the topic. It briefly mentions the Federal Trade Commission’s warning on bogus AI claims and the SEC’s crackdown on greenwashing, but does not provide any further details or examples. The article also does not explore the consequences of AI washing or the impact on businesses and consumers. Overall, the article lacks scientific rigor, intellectual honesty, and actionable insights, resulting in a higher noise level.
Financial Relevance: Yes
Financial Markets Impacted: Securities and Exchange Commission
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to the Securities and Exchange Commission and their warning against ‘AI washing’ in businesses. It does not describe any extreme events.
Public Companies: Securities and Exchange Commission (N/A)
Private Companies: The Messenger
Key People: Gary Gensler (Chair of the Securities and Exchange Commission), Tejal Shah (Associate Regional Director in the SEC’s New York office)

Reported publicly: www.wsj.com