In the bustling world of consumer electronics, artificial intelligence has become the ultimate marketing buzzword, slapped onto everything from refrigerators to light bulbs. At this year’s IFA trade show in Berlin, manufacturers paraded a slew of “AI-powered” smart home devices, promising revolutionary convenience. But as CNET reports in a recent commentary, this rampant labeling is blurring the lines of what AI truly means, leaving buyers confused and brands at risk of backlash.

The problem stems from overuse: a vacuum cleaner that adjusts suction based on floor type is now “AI-enhanced,” even if it’s just basic automation. Industry insiders note that true AI involves machine learning and adaptive algorithms, yet many products rely on simple scripts. This dilution erodes trust, as consumers struggle to discern genuine innovation from hype.

As the smart home market surges toward a projected $200 billion by 2028, the influx of AI-branded gadgets is creating a credibility crisis for established players like Samsung and LG, who must now differentiate their advanced neural networks from competitors’ superficial features, all while navigating regulatory scrutiny over misleading claims that could invite lawsuits or fines from bodies like the Federal Trade Commission.

For buyers, the fallout is tangible. A family shopping for a smart thermostat might opt for an “AI” model expecting predictive energy savings, only to find it offers little more than scheduled timers. According to insights from TechRadar, this mismatch leads to higher return rates and dissatisfaction, with surveys showing 40% of consumers feeling overwhelmed by tech jargon.

Brands face their own perils. Overpromising on AI can damage reputations when products underdeliver, as seen in past scandals with voice assistants that failed privacy promises. Executives at companies like Google and Amazon are quietly reevaluating marketing strategies to emphasize verifiable AI benefits, such as real-time learning from user habits.

Delving deeper into the ecosystem, the integration of generative AI like Google’s Gemini into home devices introduces new vulnerabilities, where researchers have demonstrated how malicious prompts could hijack controls for lights or security systems, as detailed in a CNET analysis, underscoring the urgent need for robust safeguards to prevent cyber threats from turning smart homes into liability nightmares.

On the innovation front, some companies are pushing boundaries responsibly. Startups showcased at IFA are developing AI that anticipates needs, like ovens that suggest recipes based on fridge contents. Yet, as The Verge explores, building trust requires transparency—detailing how data is used and algorithms trained—to avoid alienating privacy-conscious users.

Regulators are taking note. In Europe, the AI Act mandates clear labeling for high-risk systems, which could set a global precedent. U.S. firms are lobbying for similar standards to curb “AI washing,” where minimal tech is inflated for sales.

Amid these challenges, forward-thinking brands are pivoting toward ethical AI deployment, collaborating with ethicists and conducting third-party audits to validate claims, a strategy that could redefine consumer expectations and foster long-term loyalty in an era where authenticity trumps buzzwords, potentially stabilizing the market by weeding out gimmicks.

Ultimately, the AI label’s ubiquity signals a maturation point for the industry. Insiders predict that by 2026, discerning buyers will demand proof-of-concept demos, forcing brands to invest in substantive tech rather than superficial tags. This shift could elevate smart homes from novelty to necessity, but only if the hype gives way to honesty.