Recent developments in the tech industry have brought to light concerns about the transparency and accuracy of artificial intelligence (AI) technologies. Federal regulators are cracking down on a practice known as AI washing, where companies overstate the role of AI while relying heavily on human operators behind the scenes.

One prominent example of this is Amazon’s now-defunct ‘Just Walk Out’ technology, which used AI and machine learning to track in-store purchases. Despite the initial promise of a seamless shopping experience where customers could grab items off the shelf and leave without checking out, it was revealed that human operators were manually reviewing a significant portion of transactions.

Amazon’s use of human operators in its AI technology is not an isolated incident. Other companies, such as X.ai and GoButler, have also been found to rely on human intervention to power their AI systems. This practice, known as AI washing, involves exaggerating the capabilities of AI technology to create a facade of automation.

Regulators, including the Securities and Exchange Commission (SEC), have taken notice of this trend and are beginning to take action against companies that engage in AI washing. In a recent settlement, the SEC penalized two investment advisers for making false claims about their use of AI. The advisors had misled clients by claiming to use AI algorithms for investing purposes when, in reality, no such technology existed.

This crackdown on AI washing signals a growing awareness of the importance of transparency and accountability in the deployment of AI technologies. As regulators continue to scrutinize companies’ claims about AI capabilities, the tech industry may see a shift towards more responsible and accurate representations of AI’s role in various products and services.