Around two in five wealth managers are very concerned that companies are making false claims about the extent to which they use AI and the positive impact it is having on their operations, in a phenomenon dubbed ‘AI washing’.

This is according to new global research from fund manager Robocap, which found the concerns were among 37% of pension funds, insurance asset managers, family officers, and wealth managers with combined assets under management of $1.183 trillion.

A further 63% are quite concerned about this issue, the research found.

There are several different varieties of AI washing, which can include companies claiming to use AI when in fact they are using less-sophisticated algorithms. It could also involve overstating the efficacy of their AI over existing techniques, or falsely claiming that their AI solutions are fully operational.

Over the next three years, more than a quarter (26%) of the professional investors surveyed believe that AI washing will worsen slightly while 3% believe it will get much worse. However, almost two-thirds believe the problem of AI will become less severe, and 7% say it will not change.

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“Just like greenwashing, AI washing is a genuine problem for investors who are looking for exposure to companies that genuinely profit from the growth and operational efficiencies AI can bring,” Jonathan Cohen, founder and CIO of Robocap said.

“We believe there is a strong misunderstanding and a misuse of the term AI, a great disparity between the technological innovation and what we actually see in terms of revenues derived from it.”

“When selecting investment opportunities we look for companies with a good underlying exposure to the AI, robotics and automation theme, a strong business model backed by excellent technology, a good management team and at a compelling valuation”

Speakers at DIGIT’s inaugural FS Technology Summit also pointed to this phenomenon, questioning data that says people ‘feel’ more productive and efficient over qualitative data suggesting the same.