Is Your Company AI-Washing Rippling Founder Parker Conrad Thinks It Might Be

The tech world is buzzing with excitement over artificial intelligence (AI). But is your company genuinely using AI, or just riding the hype?

Parker Conrad, the founder of a prominent HR startup, has some thoughts on this phenomenon. He recently shared his insights on a podcast, shedding light on the practice of AI-washing.

The AI Scramble

Right now, there’s a mad scramble to capitalize on AI. Parker Conrad, founder of a major HR startup, thinks this rush may lead to AI-washing. “No one actually wants to chat with their HR software beyond the sort of novelty,” he shared during a recent podcast appearance.

Overselling AI Capabilities

Conrad believes many companies add novelty AI features to their products that don’t provide real value. “There’s just a lot of really insubstantial stuff out there,” he explained. Although AI has transformative potential, he remains unimpressed by many current implementations.

Understanding AI-Washing

Many businesses claim their products are AI-powered to attract more investors and customers. “They’re like ‘jeez if I’m a SAAS company, my multiple is 7x, but if I change my name to whatever-my-name-was-before [with] .ai my multiple is like 50x,’” Conrad noted. This illustrates how rebranding can significantly boost a company’s valuation.

AI Investment Boom

The financial figures support Conrad’s skepticism. In the first half of this year alone, AI companies accounted for 41% of all US deal value. These companies raised $38.6 billion out of $93.4 billion invested in US startups, highlighting the massive growth and interest in the sector.

Big Tech’s Role

More than 40% of new unicorns are AI startups. Last year, AI companies raised $27 billion, much of it from Big Tech investment in generative AI startups. This trend underscores the industry’s vast interest in AI innovations.

AI in Everyday Life

AI touches almost every aspect of our lives, according to Nekeshia Woods, managing partner at Parkway Venture Capital. She believes AI quickly automates routine tasks and will soon bring AI assistants and general-purpose robots.

Public Skepticism

Despite the enthusiasm, Conrad remains skeptical. He believes AI’s power lies not in generating text but in reading and processing large amounts of unstructured data. This could help businesses better understand their operations.

The Fatigue Factor

There is growing exhaustion or “AI fatigue” with overhyped AI claims, according to Conrad. Nekeshia Woods sees it differently, suggesting it’s more about questioning the real value and payoff of large AI investments. “It’s sort of hard to see from here,” Conrad commented.

In conclusion, while AI offers transformative potential, it’s essential for companies to use it meaningfully rather than as a marketing gimmick.

As investors and consumers become more discerning, the true value of AI will become evident. Until then, skepticism like Conrad’s provides a necessary check.

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Emmanuel Kesse

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