The new AI paradox: smarter models, worse data

AI promises a smarter, faster, more efficient future, but beneath that optimism lies a quiet problem that’s getting worse: the data itself. We talk a lot about algorithms, but not enough about the infrastructure that feeds them. The truth is, innovation can’t outpace the quality of its inputs, and right now those inputs are showing signs of strain. When the foundation starts to crack, even the most advanced systems will falter.

A decade ago, scale and accuracy could go hand-in-hand. But today, those goals often pull in opposite directions. Privacy regulations, device opt-ins, and new platform restrictions have made high-quality, first-party data harder than ever to capture. To fill the gap, the market has flooded itself with recycled, spoofed, or inferred signals that look legitimate but aren’t.

The result is a strange new reality where a mall that closed two years ago still shows “foot traffic,” or a car dealership appears to be busy at midnight. These anomalies may seem like innocent glitches, but they’re actually the result of a data ecosystem that values quantity over credibility.

When Volume Becomes Noise

For years, the industry believed that more data meant better insights. Volume signaled strength. More inputs meant more intelligence. But abundance now equals distracting noise. To preserve scale, some suppliers have resorted to filler data or fake signals that make dashboards look healthy while eroding their reliability and authenticity.

Once bad data enters the system, it’s nearly impossible to separate. It’s like mixing a few expired Cheerios into a fresh box; you can’t tell which pieces are stale, but you can taste the difference. And at scale, that difference compounds exponentially.

The AI Paradox

Ironically, AI is both part of the problem and part of the solution. Every model depends on training data, and if that foundation is flawed, the insights it produces will be, too. Feed it junk, and it will confidently deliver the wrong conclusions.

Anyone who’s used ChatGPT has probably felt this frustration firsthand. While it is an incredibly helpful tool, there are times when it still gives you an inaccurate answer or hallucination. You ask a question, and it promptly delivers a detailed answer with absolute confidence . . . except it’s all wrong. For a moment, it sounds convincing enough to believe. But once you catch the error, that small seed of doubt sets in. Do it a few more times, and the doubt takes over. That’s what happens when data quality breaks down: the story still looks complete, but you can’t be sure what’s real.

At the same time, AI gives us new tools to clean up the mess it inherits by flagging inconsistencies. A restaurant showing visitors on Sundays when it’s closed? A shuttered mall suddenly “bustling” again? Those are the patterns AI can catch if trained properly. 

Still, no single company can solve this alone. Data integrity relies on every link in the chain, from collectors and aggregators to analysts and end users, taking responsibility for what they contribute. Progress will come not from more data, but from more transparency about the data we already have.

Quality Over Quantity

We can no longer assume that more data automatically means better data, and that’s okay.

The focus needs to shift from collecting everything to curating what counts, building high-confidence data streams that can be verified. Leaner datasets built on reliable signals consistently produce clearer, more defensible insights than mountains of questionable information.

Many organizations still equate size with credibility. But the real question isn’t how much data you have, it’s how true it is.

The Human Element

Changing how people think about data is harder than changing the technology itself. Teams resist new workflows. Partners worry that “less” means losing visibility or control. But smaller, smarter datasets often reveal more than massive ones ever could because the signals they contain are real.

But once trust is lost, insights lose its value. Rebuilding that belief through transparency, validation, and collaboration has become just as critical as the algorithms themselves.

AI won’t erase the data problem; it will magnify it. We need to be disciplined enough to separate signals from noise and confident enough to admit that more isn’t always better.

Because the real advantage isn’t having endless data. It’s knowing what to leave behind.

source https://www.fastcompany.com/91457268/the-new-ai-paradox-smarter-models-worse-data