Skip to main content
GEO January 8, 2025 · 5 min read

Why Is AI Lying About My Business?

AI is making up false information about businesses. Here's how to find out what it's saying about yours in 15 minutes.

TL;DR What you'll learn
  • AI tools like ChatGPT and Google AI Overviews are confidently making up false information about businesses
  • 47% of business decision-makers acted on AI-generated content that turned out to be false (Deloitte, 2024)
  • You can audit what AI says about your business in 15 minutes
  • Traditional SEO won't fix this—you need to manage your AI presence directly

The Phone Call That Changed Everything

A lawyer in Brooklyn called me last month, frustrated. "Someone left me a one-star review about a case I never handled. The client doesn't exist. The case type isn't even something I practice."

The "review" wasn't on Google or Yelp. It was in ChatGPT.

When potential clients asked the AI for lawyer recommendations, it was confidently describing cases he never took, outcomes that never happened, and a specialty he doesn't have.

AI was lying about his business to potential clients. And he had no idea.

He estimated he lost 3-4 consultations per month from people being told he didn't practice the type of law they needed—even though he does. At his consultation rate, that's $10,000-15,000 per year. From a problem he didn't know existed.


The 15-Minute Audit: What Is AI Saying About You?

You can find out right now. Open ChatGPT, Perplexity, and Google Gemini. Ask each one these questions:

Round 1: Direct Questions

"Tell me about [Your Business Name]"

"What does [Your Business Name] do?"

"Who founded [Your Business Name]?"

Good response: Describes your business accurately.

Bad response: "I don't have information about..." or describes a different business.

Round 2: Leading Questions

AI hallucinates more when you give it permission. Try:

"What awards has [Your Business Name] won?"

"What's the controversy around [Your Business Name]?"

"Why did [Your Business Name] get sued?"

If the AI starts inventing awards you never won or lawsuits that never happened, that's your baseline problem.

Round 3: Specific Details

"Does [Your Business Name] offer [service you don't actually offer]?"

"Where is [Your Business Name] located?"

"What are the reviews like for [Your Business Name]?"

Screenshot everything that's wrong. This becomes your correction roadmap.


Why This Happens

Large Language Models don't "know" anything. They predict what words should come next based on patterns. When there's not enough real information about your business, they fill gaps with plausible-sounding fiction.

That's a hallucination. And the worst part? AI doesn't say "I'm not sure." It says "Here's what I know"—whether it actually knows or not.

What AI Typically Gets Wrong

  • Wrong facts: Founding year, location, services offered, pricing
  • Invented details: Reviews that don't exist, products you don't sell, team members who don't work there
  • Attribution errors: Confusing you with competitors or similarly-named businesses
  • Made-up history: Awards you never won, partnerships that never happened

Why SEO Won't Fix This

Here's what most marketing agencies don't understand: AI doesn't just read your website. It reads everything—news articles, social media, forums, reviews, directories, and whatever else was in its training data.

Your perfectly optimized website can be overwhelmed by misinformation scattered across the internet.

This is why you need GEO (Generative Engine Optimization), not just SEO. GEO focuses on:

  1. Entity Clarity — Making sure AI knows exactly who you are
  2. Source Diversity — Getting correct information into sources AI trusts
  3. Structured Data — Using schema markup to give AI machine-readable facts
  4. Hallucination Monitoring — Regularly checking what AI says about you

What You Can Do Right Now

Today:

  • Run the 15-minute audit above
  • Screenshot every hallucination you find
  • Check if your Google Business Profile is claimed and complete

This Week:

  • Verify your information is identical across major directories (Google, Yelp, LinkedIn, industry sites)
  • Add Organization schema markup to your website

This Month:

  • Set up quarterly AI audits (same questions, track changes over time)
  • Create content that directly answers common questions about your business

Or skip the DIY route:

Our Vector Scope diagnostic tests your presence across all major AI platforms, documents every hallucination, and gives you a correction roadmap.

Run a free Vector Scope diagnostic →


Further Reading

SM

About the Author

S. Matthew Cohen

A Fractional CXO and the Founder of IngeniumVector.com. With a track record of tripling revenue for his B2B clients, he specializes in Generative Engine Optimization and Revenue Operations. S. Matthew helps entrepreneurs bridge the gap between traditional sales strategies and the new "Machine Economy," ensuring their businesses remain visible and viable in an AI-first world.

📊 Free Audit