AI Washing Is Hype That Will Hurt the Channel

Vendors and partners that focus on steady AI progress will benefit in the long haul.

By Larry Walsh

AI is having a moment. Across industries, companies are racing to incorporate artificial intelligence capabilities into their products and services. The promise of AI to deliver insights, automate tasks, and optimize operations is undeniably exciting. The operational gains alone will help ease the talent crunch that has plagued the channel for the past few years and improve profitability.

But in the scramble to appear at the forefront of AI innovation, some companies are going beyond the opportunity and embracing hype for short-term gains.

According to a recent FactSet report, mentioning AI during earnings calls has become the latest tactic for boosting stock valuations. S&P 500 firms referencing AI saw their share prices outperform non-AI peers this year. This “AI washing” may juice short-term interests and stock performance but will ultimately hurt the tech industry and — by extension — the channel.

Channel partners rely on vendor marketing claims to understand the real capabilities of solutions. AI washing obscures the difference between true AI-powered products and those simply hyping buzzwords. Partners, confused about which offerings deliver tangible value to their businesses and customers, will end up wasting time vetting solutions or adopting those that fail to live up to promises.

We’ve seen this movie many times before. For years, vendors whose offerings have nothing to do with security have talked about the ability of their products and services to protect networks and data. When cloud computing went mainstream, we saw vendors race to talk about their cloud capabilities. And when smartphones made the world mobile, we witnessed vendors talk about their ability to access data through mobile apps. And we can’t forget how blockchain was going to change the world with its open ledgers and inviolable integrity. Not all claims were invalid, but many were grossly premature or misleading.

For channel partners, identifying vendors with real AI capabilities requires looking beyond the marketing fluff. True AI innovation requires major investments in data infrastructure, engineering talent, and compute power. Solutions promoted as “AI-driven” without evidence should raise skepticism.

AI washing also risks channel partners overpromising AI benefits to their customers. If underlying solutions lack robust AI functionality, partners find themselves unable to deliver on expected outcomes. This destroys credibility and trust. Partners should set proper AI expectations by being clear on actual vendor AI maturity.

In addition, AI washing slows broader AI adoption. When initial deployments fail to drive results, customers dismiss AI as overhyped technology. Constructive feedback on AI limitations gets drowned out by excessive vendor hype. Practical AI progress requires honest assessments of current capabilities and challenges.

The AI revolution will deliver tremendous value, but it requires patience. True change takes sustained commitment. Instead of relying on miracle-cure hype, vendors should focus on demonstrating step-by-step AI progress that provides tangible ROI. This isn’t to say that vendors can’t get on the AI train, but they should resist premature promises of revolutionary value that can derail their long-term efforts.

The channel, too, should avoid unrealistic expectations and seek vendors moving unwaveringly down the AI track. Steady progress may not grab headlines like AI hype, but it will lead to real business change.

Larry Walsh is the CEO, chief analyst, and founder of Channelnomics. He’s an expert on the development and execution of channel programs, disruptive sales models, and growth strategies for companies worldwide. Follow him on Twitter at @lmwalsh_CN.