Hype machine

The FTC warns companies to keep AI claims “in check”

FTC Commissioner then-nominee Lina M. Khan testifies during a Senate Commerce, Science, and Transportation Committee nomination hearing on April 21, 2021 in Washington, D.C. (Credit: Getty Images)

When you ask people questions for a living, some answers stick with you.

In a January interview, entrepreneur and co-founder of Empower Delivery Chris Baggott recalled reading about a restaurant technology company that claimed it used artificial intelligence (AI) to market to its diners. Specifically, he said, the company’s leader touted their company’s ability to use AI to target cheeseburger-lovers with emails about cheeseburgers. 

“That’s not AI. That’s using an Excel spreadsheet or CSV file,” Baggott said. “People are getting caught up in the hoopla.” 

In late February, the government stepped in to help control the hoopla. The Federal Trade Commission, a federal agency that regulates business, issued official guidance to tech companies, warning them in a blog post to keep AI claims in check. 

According to the FTC, AI is an ambiguous term that generally refers to using technology to make predictions, decisions, or recommendations. But what it lacks in clarity it makes up in usage: “it’s a marketing term,” said the FTC. 

The guidance, which TechCrunch called “sassy,” warns businesses against so-called hype.