How Can SMBs Leverage AI Without Being Caught in the Hype?

As the topic of artificial intelligence continues to dominate media headlines, the danger of falling prey to the AI bubble becomes more real for many businesses. That’s especially true for small business owners. SMBs may be tempted to jump on the AI train, believing the hype that it will simplify their life or help them get a leg up on their competitors. Then, of course, there’s the group who fear missing out on the latest trend. 

Does this sound like you? Or have you been skeptical of the AI bubble and not sure if AI can actually help your business? Let me tell you: The answer lies somewhere in between. You shouldn’t fear AI, nor should you jump in blindly. 

Should a business owner invest in technology if they don’t understand the full implications or if they have doubts the platform will deliver the results they desire? 

Personally, I don’t think so. 

In this article, I will explore how small and medium-sized businesses can leverage AI effectively and avoid falling into the bubble.

What Is the AI Bubble and How Did It Come About?

The term "AI bubble" refers to how overhyped the topic of AI development has become, with companies rushing to adopt AI-driven solutions simply because it's the latest “hot” thing. They overestimate the immediate benefits of AI and don’t consider whether they even need to adopt the technology. 

To make matters worse, some companies artificially inflate the importance of AI in their operations to please investors and gain attention. This trend is called "AI washing," when firms either claim to be using artificial intelligence when they are not, or overstate the scope of their AI solutions. 

The irony here is that most people don’t view “AI-powered” as a marketing benefit at all, and are likely to steer clear of AI tech. One study out of the University of Akron, published by Science Direct, found people prefer the term “smart” over “AI-powered,” although there are different shades of meaning in the two terms.

Another study from Washington State University, published in the Journal of Hospitality Marketing and Management and widely reported across news sources, found that consumers preferred the phrase “high-tech” over “AI.” 

It’s not just that AI is not (necessarily) a desirable selling proposition. Companies often lie about their AI capabilities, hyping them up beyond their practical applications. Those who do this will continue to erode trust in the industry – and could find themselves in hot water with regulatory agencies. 

The U.S. Securities and Exchange Commission has issued multiple warnings about “AI washing,” and there have been cases where companies had to pay fines for misleading their investors. 

All of these factors have led to the creation of the AI bubble, a situation where AI-related services may be over-valued. The market is rife with skepticism. 

The general sentiment among many parties is that the bubble is coming closer to bursting. To give just one example, Goldman Sachs' global equity research head, Jim Covello, previously expressed doubt that AI will be able to generate enough value in the coming years to justify the trillion-dollar investments projected for this sector.

Focus on Identifying Real AI Value

Everything that we’ve covered above leads to my main point: Companies must be truthful about their actual use of AI and the associated risks. And if they can’t clearly answer the question of what benefits AI integration would bring for their operations, they should not pursue this technology in the first place. They only risk wasting time and money.

To avoid the AI bubble, businesses should focus on whether artificial intelligence is truly going to solve some kind of problem for them or if it is being implemented for the sake of hype. This is especially important for SMBs that are often limited in their resources and need to weigh their investment choices carefully.

For example, in financial services, large language models (LLMs) have shown a lot of promise in such areas as compliance and fraud detection, automating processes that would otherwise require intervention from compliance teams.

Small banks and payment startups can struggle to afford the high salaries of compliance officers, so from their perspective, AI integration can indeed be very useful, both in terms of handling repetitive tasks, and in saving time and money.

The mean salary for a compliance officer in the U.S. is $80,190, as reported by the Bureau of Labor Statistics. They aren’t the highest paid professionals on a finance company’s payroll, to be sure. But there’s another issue besides cutting costs by incorporating AI.  

Compliance officers are often in short demand. The U.S. Bureau of Labor and Statistics projects 4.6% job growth for the industry between 2022 and 2032. Small financial firms struggle to find, hire, and train good compliance officers. Most of the available candidates are usually snatched up quickly by larger banks with the bandwidth to recruit and the budget.

To sum up, while the allure of AI has attracted a lot of hype, it is important for SMBs to remain grounded and avoid getting caught up in the “noise.” Just because your competitors may be adopting AI, that doesn’t mean that you should feel pressured to do the same if there is no clear business utility.

The key to leveraging AI effectively is to focus on solving real problems. By identifying specific challenges, companies can avoid the AI bubble and make smart, strategic investments that deliver real value and improve their operations.

If you see that a problem can be solved in simpler ways, then it’s only sensible to steer clear of AI. Ultimately, I believe that businesses that approach AI carefully will be the ones that thrive while others will be left to deal with the fallout of poorly considered decisions and unmet expectations.

Roman Eloshvili is the founder of ComplyControl, a UK provider of AI-powered services that improve risk management practices and ensure regulatory compliance among financial organizations.