Recognizing AI companies: Expert tips to protect against fakes

Our expert explains how investors, business partners and the media can tell whether a real AI company is just fake.

An article by Fabian Westerheide. He is a founding partner of the AI-focused venture capital investor AI.FUND and has been investing privately in AI companies through Asgard Capital since 2014. Westerheide provides strategic advice to public and private institutions in the field of AI and invites people to the Rise of AI conference in Berlin every year.

Since 2023, we have seen a huge increase in interest in artificial intelligence. Many companies are taking advantage of this trend by presenting themselves as AI companies. But is there really AI in everything that it says on the tin? It is important for investors, business partners and the media to recognize the difference between companies that truly use AI as a central part of their business strategy and those that use the term only for marketing reasons.

These are the characteristics of real AI companies

Real AI companies integrate the technology deeply into their products and services. AI is not just a feature, but the heart of the business model.

In addition to startups, established companies are also relying on AI. The largest market and most use cases can be found in existing companies that are using AI specifically to expand their value chains. Siemens For example, has developed an AI-based fire detection system that outperforms conventional systems and is already being used in practice. Bosch uses AI to make the production of electric motors more efficient and precise, resulting in significant efficiency gains. Deutsche Bahn has been using AI in traffic management for years to improve the punctuality and efficiency of its trains – with mediocre success.

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Learn from real AI success stories!

There are numerous examples of how companies use AI to create real innovations and increase their efficiency. One example is materials research: Companies that use AI to develop new materials are revolutionizing research. An AI that accesses huge amounts of data can discover innovative materials in a very short time and thus not only support the work of scientists, but often significantly surpass it.

Another example is the use of AI in the financial world, for example to automate Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. Tasks that were previously performed manually are now performed more efficiently and accurately by AI, saving time, reducing errors and allowing companies to focus on more complex tasks.

The ability of some AIs to write patents is particularly impressive. They analyze scientific papers, compare them with existing patents and create legally secure patent applications in a very short time. What would previously have taken months is now done by this AI in just a few hours – a clear advantage in a competitive world.

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Distinguishing between AI features and core technology

It is important to distinguish between companies that use AI as a central component of their products or services and those that see AI as a supplement. A company that uses AI only to optimize internal processes – for example in accounting or CRM management – can be useful and profitable, but is not a classic AI company. The core technology of such a company is not based on AI; AI is a means of increasing efficiency.

Beware of fake AI companies

In a world where AI has become a hot topic, there is a danger of being fooled by companies that write “AI” on their products but only use superficial AI elements. These companies may have short-term success by catering to the current hype, but often do not offer real added value. Their business model is not based on AI, but on traditional methods, and the AI ​​is only used as a selling point.

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How to recognize real AI

1. Check the business model: Pay attention to whether AI is truly the heart of the company or just an add-on. A true AI company will have built significant parts of its business model around AI technologies. This means that AI is not just a nice-to-have feature, but critical to the company's success.
2. Evaluate the efficiency gains: Real AI leads to significant time and cost savings. If a company claims to use AI but cannot demonstrate significant efficiency gains, be skeptical. Ask for concrete examples and numbers that prove the benefits of AI.
3. Demands transparency: Real AI companies are proud of their technology and are happy to share details about how their AI works. If a company remains vague or can't explain how the AI ​​actually works, it's probably not real AI.

Conclusion: Quality and real added value count

In times of AI hype, it is crucial to take a close look at which companies are really betting on AI and which are just trying to capitalize on the trend. Real AI companies are characterized by the deep integration of technology into their business model and offer long-term innovations and efficiency gains. Investors and business partners should therefore carefully consider which companies they invest in in order to focus on quality and real added value in the long term.