What is AI washing?

Two uses of the term

The U.S. Securities and Exchange Commission (SEC) has applied the label to firms that exaggerate their own use of AI. In March 2024 it announced settled charges against two investment advisers, Delphia (USA) and Global Predictions, for false and misleading statements about their use of AI. The firms agreed to pay $400,000 in combined civil penalties without admitting or denying the findings. Gary Gensler, the SEC's chair at the time, said such AI washing hurts investors.

In labor market coverage the phrase has a second meaning: attributing job cuts to AI when the technology is not the main cause. OpenAI chief executive Sam Altman used it this way in February 2026. Speaking to CNBC-TV18 at the India AI Impact Summit, he said some companies blame AI for layoffs they would have made anyway, Fortune reported. He also said some displacement by AI is real.

Why it is hard to verify

Outplacement firm Challenger, Gray & Christmas tracks job cuts announced by U.S.-based employers. It reported on October 1, 2026 that AI had been cited for 120,136 cuts in the first nine months of the year. That was about 21% of the total and more than any other reason, it said. Those figures record the reasons cited in announcements, not an independent finding of cause.

Oxford Economics said in a January 2026 research briefing that it saw little sign of companies substituting AI for workers on a large scale. More traditional reasons for layoffs were cited far more often, it said. A working paper issued by the National Bureau of Economic Research in February 2026 surveyed nearly 6,000 executives in the United States, United Kingdom, Germany and Australia. About nine in ten reported no effect of AI on employment or productivity at their own firms over the previous three years. Yet they expected AI to cut employment by an average of 0.7% over the next three.

Where things stand in 2026

As of October 2026 these sources measure different things. Challenger counts reasons given in layoff announcements. The NBER paper reports executives' own accounts. Oxford Economics assesses economy-wide data. In Challenger's data AI was the fifth most cited reason in September 2026, with 3,961 cuts, about 9% of the month's total. Oxford Economics also noted anecdotal evidence that jobs were already being lost in sectors open to automation by AI.