In brief: Misclassification of standard software as AI systems creates compliance risks and undermines the credibility of genuine AI innovations.
Many companies market conventional automation software as artificial intelligence. This leads to legal uncertainties, particularly in the context of the EU AI Act.
The phenomenon of “AI washing” describes the systematic miscategorisation of established software processes as Artificial Intelligence. Companies across various industries – from shoe manufacturers to genetics laboratories to the real estate sector – label their products with AI attributes, although the underlying technology often represents traditional data processing, rule-based systems or standard automation. Concrete examples include mobile scanning devices for building surveying or laser-based security systems that are marketed as AI solutions without genuine machine learning components.
For compliance managers, this creates a significant risk: the EU AI Act makes a strict distinction between automation systems and AI systems with learning capabilities, and obligates the latter to enhanced transparency, documentation and conformity assessment requirements. Companies that misclassify their products risk not only reputational damage, but also violations of regulatory requirements. Authorities could penalise false declarations as consumer deception or inadequate compliance documentation.
The ongoing dilution of terminology further undermines the distinguishability between genuine innovation and marketing inflation. Investors and business partners lose confidence in manufacturer claims when standard processes are consistently presented as breakthroughs. For the compliance sector, this requires a more precise internal definition: which systems actually meet the criteria of the AI Regulation? Where is the line between automation and intelligence? Accurate self-classification is a prerequisite for compliant marketing and risk-proportionate certification procedures.
Source: www.it-daily.net · Published 2 June 2026
Lumi AI News — AI-assisted curation in accordance with Article 50 EU AI Act. Paraphrase and classification by Lumi News Pipeline v1.2.9.