In the rush to capitalize on the artificial intelligence hype, companies across industries are eagerly branding their products and services as “AI-powered.”

From smart home devices to financial tools, the label is often seen as a shortcut to consumer intrigue and investor interest. However, recent research suggests that this marketing strategy may backfire, as consumers exhibit growing skepticism toward AI-labeled offerings, particularly when the perceived risk of the product is high.

According to a report by The Wall Street Journal, consumers are less likely to trust products explicitly marketed as being powered by artificial intelligence, which in turn dampens their willingness to purchase them. This trend is especially pronounced for high-stakes items like automobiles or medical devices, where reliability and safety are paramount. The findings indicate that the term “AI” can evoke concerns about unpredictability, data privacy, or even ethical implications, rather than the cutting-edge innovation companies intend to convey.

The Trust Deficit in AI Branding

This consumer hesitancy is not merely anecdotal but grounded in a broader cultural shift. As AI systems have become more visible in daily life—through chatbots, recommendation algorithms, and autonomous technologies—so too have their failures and limitations. High-profile incidents of AI bias, errors, or misuse have left a lasting impression, making the public wary of overreliance on such systems in critical contexts.

The Journal highlights that researchers have identified a clear correlation between the perceived risk of a product and the negative impact of AI branding. For instance, a potential buyer might embrace AI in a low-risk application like a music playlist generator but recoil at the idea of AI controlling a vehicle’s braking system. This dichotomy poses a significant challenge for marketers who must balance the allure of innovation with the need to build trust.

Navigating the AI Marketing Minefield

For companies, the takeaway is clear: touting AI as a core feature may not always be the winning strategy. Instead, focusing on tangible benefits—such as improved efficiency, personalization, or cost savings—could resonate more effectively with consumers. By emphasizing outcomes rather than the underlying technology, businesses can sidestep the skepticism that the AI label often triggers.

Moreover, transparency about how AI is integrated into a product can help mitigate distrust. Providing clear explanations of data usage, safety protocols, and human oversight can reassure consumers that the technology is a tool, not an unchecked force. As the Journal notes, companies that fail to address these concerns risk alienating a customer base increasingly attuned to the ethical and practical implications of AI.

A Call for Strategic Restraint

The implications of this research extend beyond marketing departments to the C-suite, where long-term brand reputation is at stake. Overpromising on AI capabilities or slapping the label on products with minimal AI integration can erode credibility, especially if the technology underperforms or sparks controversy. A more measured approach, where AI is positioned as one of many components rather than the sole selling point, may prove wiser.

Ultimately, as the AI landscape continues to evolve, companies must adapt their messaging to align with consumer sentiment. The allure of AI as a buzzword is undeniable, but its overuse or misapplication in marketing could do more harm than good. By prioritizing trust and transparency, businesses can harness the power of AI without falling victim to its pitfalls, ensuring that innovation and consumer confidence go hand in hand.