AI Skill Exaggeration: The business risk of human hallucination

Ignorance is bliss—unless you’re trying to adopt AI, in which case it can make or break your efforts. Unfortunately, it’s not so easy to figure out who’s talking, and who’s just throwing out AI buzz words. A recent study by Pluralsight revealed that 79% of professionals admit to overstating their AI knowledge, while this figure rises to 91% among C-suite executives, making them the most frequent offenders.

What is AI Skill Exaggeration?

AI Skill Exaggeration is when someone intentionally or unintentionally exaggerates their AI knowledge or abilities. This can have significant implications for organizational decision-making, innovation, and workplace dynamics, as 65% of organizations have had to abandon AI projects due to a lack of AI skills among staff.

Key factors contributing to AI Skill Exaggeration

• The pressure to stay competitive: The rapid adoption of AI technologies has created an environment where professionals feel compelled to demonstrate proficiency, even if they lack the necessary skills. For C-suite executives, this pressure is especially acute, as 87% report feeling intense urgency to implement generative AI solutions to meet shareholder and board expectations or to avoid falling behind competitors.

• Career advancement and job security: Many professionals believe that AI expertise is critical for career growth and job retention. For instance, 95% of tech practitioners and executives view AI skills as important to job security, leading some to exaggerate their knowledge to appear more competitive.

• Cognitive biases: The Dunning-Kruger effect, where individuals with limited knowledge overestimate their competence, plays a role. Professionals may believe they understand AI well enough to "fake it," unaware of their actual knowledge gaps.

• Cultural and organizational expectations: In some workplaces, there is a stigma around admitting a lack of AI knowledge, as it may be perceived as a weakness. According to Gartner, this is particularly true for senior leaders who feel the need to project confidence and authority in their roles.

• Lack of training: While many organizations are rushing to adopt AI, formal training programs are often inadequate. This leaves employees and leaders underprepared, incentivizing them to exaggerate their expertise to bridge the gap.

Why C-suite executives are the biggest offenders

C-suite executives are particularly prone to overstating their AI expertise due to their visibility and the high stakes of their roles. They face immense pressure to lead AI-driven transformations and maintain credibility as forward-thinking leaders. Additionally, internal organizational dynamics, such as power struggles and the need to assert control over AI initiatives, further incentivize exaggeration. Gartner research shows that only 26% of executives rate their peers as truly confident and proficient in AI, highlighting a significant skills gap at the top. 

The business impacts of AI Skill Exaggeration

• Reduced decision quality: Overstated expertise can lead to poor decisions regarding AI tool selection, data interpretation, and strategic planning. This increases the risk of adopting flawed or biased AI solutions.

• Loss of trust: When exaggeration is uncovered, it can erode trust within teams and damage organizational credibility.

• Groupthink: Team members may hesitate to challenge incorrect claims about AI due to someone’s overstated expertise, especially if made by overconfident leaders.

• Missed learning opportunities: Organizations may overlook the need for training and development, leaving real capability gaps unaddressed.

• Resource misallocation: Overestimating organizational readiness for AI can lead to wasted resources on ill-suited projects, undermining innovation momentum.

Conclusion

The AI Skill Exaggeration trend underscores the need for organizations to prioritize honest self-assessment of AI skills at all levels. Transparent communication, robust training programs, and a culture that values learning over image are essential to mitigating the risks associated with exaggerated AI knowledge. By addressing these issues, businesses can make more informed decisions, foster genuine innovation, and build a workforce that is truly prepared for the AI-driven future.

Want to find out more about this trend and others? Download Pluralsight’s full 2025 AI Skills Report to learn more about the AI landscape and how to build real AI skills that empower AI adoption and long-term success.