By Vicky Sidler | Published 30 November 2025 at 12:00 GMT+2

If you’ve ever asked ChatGPT how to price your product, plan your next move, or position your business, you’re not alone. You’re also not getting real-time answers.

This article follows two others: why you can’t trust AI for legal advice and why you can’t trust it for medical advice. Turns out, business advice from AI has the same problems—only this time, it hits your bank account faster.

TL;DR:

AI business advice is:

• Based on outdated information

• Often completely made up

• Lacking context or judgment

• Trusted more than it should be

• Dangerous when used for real decisions

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Table of Contents:

The Business World Moves Daily. AI Doesn’t.

Business moves fast. Competitor pricing changes. Customers shift. New trends emerge. Good decisions require up-to-date information.

AI doesn’t have that. Most AI tools haven’t been updated since April 2025. That means they know nothing about what happened last week—or last quarter.

Bloomberg’s B-PIPE data service updates in milliseconds. Financial pros pay top dollar for it because being late by even a second costs real money. Business intelligence services, industry newsletters, trend tools—these all exist because staying current is what gives you an edge.

AI models? Frozen in time. If something happened after their last update, they don’t know. And if they don’t know, they’ll guess.

When You Ask a Consultant That Can’t See the News:

Imagine hiring a business consultant who hasn’t read the news in over a year. Now imagine asking them if you should launch a product, raise prices, or enter a new market.

If you’re using a public AI tool for advice, that’s exactly what you’re doing.

Your AI won’t know:

• What your competitors just did

• What your customers want now

• Whether that SaaS tool still exists

• If that regulation changed last month

And even when new info is online, AI doesn’t always know if it’s true.

One study found that 64% of marketing leaders believe their AI is working with live data. Only 39% of social media managers agree. That disconnect? It costs teams three workdays a week trying to fix what the AI gets wrong.

That’s around $41,500 a year. Just to clean up stale advice.

Hallucinations Sound Like Good Strategy:

Outdated info is bad. But made-up advice? That’s worse.

AI often fabricates answers. This is called hallucinating. It doesn’t say “I don’t know.” It just gives you something that sounds smart.

The numbers are rough:

• 68% of business leaders say they struggle to tell real from fake AI info

• 77% of companies have seen hallucinations in their AI tools

• 41% made business decisions based on hallucinated data

Marketing teams are especially vulnerable. They spend 30 to 40 percent of their time fact-checking AI-generated content. That’s not a boost. That’s babysitting a machine.

When Fiction Becomes Expensive:

This stuff isn’t theoretical. It’s costing real money in the real world.

• Air Canada had to honour a refund policy their chatbot made up.

• DPD’s AI assistant insulted the company during a live chat. The customer shared the screenshot. Twitter took care of the rest.

• Marketing leaders admitted losing 20% of their budgets to poor AI output.

• Compliance officers in 28% of companies made risky decisions based on hallucinated regulations or competitor moves.

• Consumers? 71% say they’ll ditch your brand after one bad AI experience.

That’s one fake answer away from losing trust.

Why AI Can’t Do Strategy:

Here’s the core problem. Business decisions require:

• Judgment

• Industry expertise

• Context

• Real-time intelligence

AI has none of these.

It can’t weigh risks. It doesn’t know your market nuances. It can’t apply human intuition or lived experience.

Even worse, when something sounds like it came from an “AI Strategy System,” teams are more likely to trust it without checking. Authority bias kicks in. The same fiction feels more credible just because it came from a machine.

How AI Actually Works—And Why That Matters:

One reason AI advice feels so confident is because people assume it works like Google. That it’s actively searching the internet and returning the best answers in real time.

But that’s not what’s happening.

Most AI tools don’t search the web. They generate answers by predicting what text should come next, based on patterns from past data. They’re not verifying anything. They don’t know what’s real. They just make educated guesses.

And even tools that can access the internet—like Perplexity or ChatGPT with web browsing—still fall short. Here’s why:

• They only scan a small number of sources per answer (limited by token size)

• They don’t check if the source is credible

• They still hallucinate citations, quotes, and numbers

• They can’t tell the difference between a peer-reviewed study and a Reddit rant

I’ve personally seen Perplexity Pro return fake sources with a straight face. Not because it’s trying to mislead you. Because it doesn’t know the difference.

It’s not reading the full internet. It’s skimming a few things and stitching together what sounds smart. That’s fine for summarising Wikipedia. But not for guiding business decisions.

And let’s not forget: if AI can’t remember what you told it ten minutes ago, it’s definitely not tracking your market conditions, competitor launches, or shifting customer sentiment.

When No One’s Accountable:

If a real consultant gives you bad advice, you fire them. Maybe ask for a refund. They have a reputation to protect.

AI? No skin in the game. No updates. No liability. No accountability.

If you act on its advice and it was wrong, there’s no one to sue. No one to blame. Just you, your money, and a decision that didn’t work out.

The Risk Is Bigger Than You Think:

Business decisions have price tags.

• A bad pricing strategy = lost revenue

• A fake market trend = wasted campaigns

• Wrong competitor data = wasted investment

• Poor product advice = missed opportunities

All because the advice came from a chatbot trained on outdated internet content.

What to Do Instead:

You don’t need to throw the baby out with the bathwater, as they say. AI isn’t useless, it just can’t be your business coach. Use it to explain. Not to decide.

Here’s where AI can help:

• Simplifying concepts

• Summarising research

• Preparing you to ask smarter questions

Here’s where you need a real human:

• Strategic decisions

• Financial planning

• Product launches

• Customer positioning

Hiring a qualified consultant might cost more upfront. But compared to the price of acting on hallucinated advice, it’s a bargain.

AI is a great assistant. It is not your business partner.

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Related Articles:

1. Why You Can’t Trust ChatGPT, Perplexity or Other AI For Legal Advice

AI will confidently present guesses or opinions as facts. If you want a clear example of why human expertise still matters, start here.

2. AI Medical Advice Is Usually Wrong and Sometimes Dangerous

It’s not just legal advice that AI makes up. Medical advice from AI is outdated, inaccurate, and risky.

3. AI Therapy Is Dangerous Research Shows Why

Emotional support from AI sounds harmless. This shows why it’s not. Read what researchers discovered about bots and mental health.

4. AI Slop Is Breaking the Internet—Here’s What Small Brands Can Do

If hallucinated advice makes you nervous, this one shows how false content is flooding the internet—and what your brand can do to stay credible.

5. AI Ethics Explained for Small Business Owners

If this article made you think about where AI advice even comes from, this one gives a plain-English guide to responsible AI use.

Frequently Asked Questions About Using AI for Business Advice

1. Can I use ChatGPT or Perplexity for business decisions?

You can use them to get ideas or understand general concepts, but they should not be used to make decisions. AI tools are often based on outdated information and can generate confident-sounding advice that is completely wrong.

2. How current is the data used by AI tools?

Most AI models have a knowledge cutoff. As of late 2025, many are trained on data from early 2024 or earlier. That means they have no idea what changed in your market recently—and they’re not checking live data either.

3. Why does AI advice sound so believable if it's often wrong?

AI is designed to sound confident. It predicts what the next sentence should be, not whether it’s true. That tone makes fiction feel like fact, even when the information is totally made up.

4. What is a hallucination in AI?

A hallucination is when AI invents something that sounds real but isn’t—like fake stats, false competitor info, or completely imagined strategies. It’s a common problem and very hard to detect without fact-checking.

5. How does AI get its business information?

AI tools are trained on publicly available internet data. That includes news articles, blogs, forums, and more. It doesn’t verify or rank sources. A peer-reviewed industry report and a Reddit post by BusinessBro99 are treated the same.

6. Can AI understand my specific business context?

No. AI can’t understand your goals, team dynamics, financial position, customer base, or market conditions. It gives generic advice and cannot apply strategic judgment like a real consultant can.

7. Have businesses made costly mistakes by trusting AI?

Yes. From Air Canada’s chatbot inventing refund policies to companies wasting 20% of marketing budgets on hallucinated insights, the damage is real—and measurable.

8. What kind of business advice should I never get from AI?

Anything involving pricing, hiring, expansion strategy, product positioning, or competitive analysis should be reviewed by a qualified human. AI might get the format right, but not the facts or relevance.

9. Can AI be helpful in any part of business strategy?

Yes, if you use it as a support tool. It can summarise info, explain concepts in plain English, or help brainstorm ideas. But it should never be the final voice on anything involving risk or cost.

10. How can I protect my business from AI-generated mistakes?

Treat AI like an intern: helpful but not trustworthy on its own. Always fact-check, verify sources, and consult a qualified advisor before acting on anything strategic.

👉 Need help getting your messaging right?Download the 5 Minute Marketing Fix.