AI or Smoke‑and‑Mirrors? Spotting False AI Claims Before You Sign the LOI

Why “AI‑washing” is the newest valuation trap

The AI gold‑rush has arrived—but so has AI‑washing. Gartner flagged more than 1,000 vendors marketing “AI‑powered” products, many of which are just glorified workflow automations.    Meanwhile, a 2025 McKinsey survey shows only 1 % of companies consider their AI capabilities mature.    Translation: buyers risk paying an innovation premium for technology that isn’t real, scalable, or defensible.

Enter the Impact Red Flag Scan™—a rapid, pre‑LOI assessment that cuts through the AI hype and tells you whether the code under the hood matches the marketing on the slide deck.

The AI Reality Check: How the Scan Exposes Hype

AI Readiness / AI Substance is now one of eight weighted vectors in our Valuation Impact Matrix (VIM Score™). During the Scan we:

• Inventory real ML assets – model repos, feature stores, GPU utilisation logs.

• Validate data pipelines – volume, quality, governance that support training and inference.

• Score MLOps maturity – version control, rollback, monitoring, ethical‑risk safeguards.

  
  

Any mismatch between pitch deck and evidence hits the VIM Score™ hard—moving a target from accretive to amber(price adjust) or red (walk).

Translating Tech Signals into Deal Math

Boards don’t want another glossary; they want numbers that drop into the model. That’s why every Scan culminates in:

• VIM Score™ (0–100) — eight vectors rolled into a single composite.

• Machine‑readable exports — XLS & JSON files you can drag into DealCloud, Power BI, or Excel sensitivity tables—no re‑keying, no translation layer.

 What Your Board Gets on Day 7 (or sooner)

A concise, IC‑ready deliverable set:

• Executive Flash Report — one page, red/amber issues, headline VIM Score™, AI reality verdict.

• Board Slide Pack (5 charts) — heat‑maps, financial impact table, recommended LOI language tweaks.

• Prioritised Risk Register — probability, impact, mitigations for each critical finding.

• Evidence Folder — sanitised artefacts: pipeline diagrams, MLOps screenshots, interview notes.

• VIM Score™ Export — XLS + JSON for instantaneous model updates.

Key Takeaway

AI‑washing is real, and it’s expensive. The Impact Red Flag Scan™ exposes inflated claims in five to ten calendar days (seven is typical), converts the truth into a single VIM Score™, and hands you artefacts your board can act on—so you negotiate harder, pivot faster, or walk away before hype becomes a costly line item.

Ready to separate genuine AI value from smoke‑and‑mirrors? Book a 15‑minute scoping call at michael@theimpactcto.com or learn more at theimpactcto.com