At least 27 US-listed companies have added AI-related terms to their names since 2023, triggering a combined $8.7bn market-cap surge — a 106 per cent jump at peak versus the pre-announcement week. An FT analysis shows more than half those gains had evaporated by end of last month, with seven firms now valued below their pre-rebrand levels. Most are microcap or pink-sheet stocks; several, like Hoth Therapeutics (renamed Rocket One), pivoted weeks after auditors flagged going-concern doubts.

The pattern mirrors the dotcom and crypto booms. During the late-1990s bubble, "com" name changes earned 72 per cent excess returns in ten days. In 2017, Long Island Iced Tea soared 500 per cent after becoming Long Blockchain, only to face an SEC insider-trading probe years later. One current outlier: Cipher Digital, formerly Cipher Mining, has held a 50 per cent gain to nearly $10bn by pivoting to data-centre construction for hyperscalers.

The SEC has launched enforcement against "AI washing" since 2024, targeting advisers and start-ups that overstate AI capabilities. Lawyer Sean Fulton warns that adding "AI" to a name to signal a non-existent business line draws scrutiny. Acadian's Owen Lamont argues the renames target retail investors on trading apps: "Maybe it doesn't work permanently, but it works a little."

History suggests the market eventually punishes cosmetic pivots. Without durable revenue from AI infrastructure or services, today's rebrands risk joining Long Blockchain as cautionary tales — and the SEC's expanding "AI washing" dragnet makes the legal risk tangible.