Investors Alarmed by Rising 'AI Washing' Concerns in Startups

European companies investing in generative AI are under pressure to demonstrate returns by next year, as investor patience wanes amid economic uncertainty and competition from lower-cost AI models. Despite a bullish outlook on AI's potential, preference is shifting towards companies that effectively adopt AI technology rather than those that primarily supply hardware. Meanwhile, venture capital firm General Catalyst is advocating for reforms to expedite the FDA approval process for healthcare AI, aiming to enhance innovation in the sector. Additionally, a survey revealed that 46.9% of cryptocurrency investors view AI-based digital assets positively, although sentiment varies significantly among different investor groups. Concerns about 'AI washing' are also rising, with many startups exaggerating their AI capabilities to attract funding, prompting investors to become more discerning. Overall, the landscape for AI investments is marked by both optimism and caution as stakeholders navigate evolving market dynamics.