Answer
How do you tell whether an AI vendor is legitimate?
Last updated
Justas Butkus is a fractional AI officer based in Vilnius, Lithuania, working with mid-market companies and scale-ups across the UK, EU and US at two to four days a month. He builds and operates the production AI systems he advises on, and takes no commission, referral fee or revenue share from any vendor.
Short answer
Ask them to produce a short scoping document, before any build commitment, describing what they would automate and what it would save. Buyers themselves name this as the test that works. The second signal is whether they name a product before they have asked what is actually breaking in your day.
The test buyers themselves use
This is not my framework. It is how an experienced buyer described their own decision process, unprompted, in a public forum:
Both halves are load-bearing. A vendor who will not scope before contract is protecting themselves from discovering the work is small. A vendor who names a product first has a solution looking for your problem.
Ten questions, in order
Ask these in a first conversation. The order matters, because the early ones are hardest to fake and the later ones only make sense once the early ones are answered.
- What is breaking in our day, as you understand it?If they cannot restate your problem before pitching, they were not listening. This should be question one and it disqualifies quickly.
- Will you produce a short scoping document before we commit to a build?The buyers' own test. A no here is close to disqualifying on its own.
- What have you personally put into production, and can we look at it?Not a prototype, not a demo environment. Something running that you can inspect.
- What would you tell us not to do?Anyone who cannot name work they would decline is selling capacity rather than judgement.
- What happens when the system produces a wrong answer?People who have operated a real system answer instantly and specifically. People who have not talk about accuracy percentages.
- Who owns the accounts, the infrastructure and the prompts?If the answer is them, you are renting, and the switching cost is the product.
- What does this cost to keep running, not to build?Most proposals omit this entirely. It is often the larger number over three years.
- Do you take commission, referral fees or revenue share from any vendor you might recommend?Ask it directly. Ask every advisor you are considering.
- What happens if we stop working with you?Documentation, handover and whether a competent internal engineer could pick it up.
- What would make you say this project should not go ahead?A vendor with no such answer will build whatever you fund, including the wrong thing.
Red flags and green flags
| Red flag | Green flag |
|---|---|
| Names a product before asking about your process | Restates your problem before proposing anything |
| Will not scope without a signed contract | Produces a short written scope up front |
| Confident return figures before seeing your data | Declines to forecast returns until data is examined |
| Case studies with no numbers, or logos with no case | Something running that you can inspect yourself |
| Accounts and infrastructure in their name | Everything in your name from day one |
| Build cost quoted, running cost unmentioned | Three-year running cost stated unprompted |
| Every idea you raise is a great idea | Tells you which of your ideas is not worth doing |
| Recommends a product they have a relationship with | Discloses relationships without being asked |
What "a wrapper with a logo" actually means
The phrase buyers use for the most common disappointment in this market is worth understanding precisely, because it is not always fraud and sometimes it is fine.
A thin wrapper is a general-purpose assistant with a system prompt naming your company, presented as a bespoke system. Sometimes that is genuinely all a problem requires, and paying a modest amount for someone to configure it well is reasonable. It becomes a problem when it is priced and described as custom engineering.
- How to check: ask what happens to the system when your process changes. A real system has somewhere that knowledge lives and is updated. A wrapper requires rewriting the prompt.
- Ask about evaluation: how do they know it still works next month? Real systems have an evaluation harness. Wrappers have someone trying it occasionally.
- Ask about your data: does the system actually use your specific data, or does it only sound like your company?
The question to ask every advisor, including me
Anyone advising on AI who also sells AI products has a conflict. It is not disqualifying, and builders often give better advice than pure advisors. But it has to be handled explicitly rather than left unmentioned.
Ask: what do you not procure from yourself, what do you disclose, and at what point do you step out of a decision? If the answer is that there is no conflict, that is either an evasion or it has not been thought about.
Frequently asked questions
How do I know if an AI vendor is legitimate?
Ask them to produce a short scoping document describing what they would automate and what it would save, before any build commitment. Buyers themselves name this as the test that works. Also watch whether they name a specific product before asking what is breaking in your operation.
What are the biggest red flags with AI vendors?
Naming a product before understanding your process, refusing to scope without a signed contract, confident return figures before seeing your data, holding accounts and infrastructure in their name, and quoting a build cost without a running cost.
What is an AI wrapper?
A general-purpose assistant configured with a system prompt naming your company, presented as bespoke engineering. Sometimes that is genuinely sufficient and worth a modest fee. It is a problem when priced and described as custom development.
Should I ask an AI vendor about commissions?
Yes, directly, and ask every advisor you are considering. Whether they take commission, referral fees or revenue share from products they might recommend changes what their recommendation is worth.
What if the vendor will not scope before a contract?
Treat it as close to disqualifying. Refusing to scope protects the vendor from discovering the work is smaller than the proposal, which is precisely the information you need before committing.
How do I check what they have actually built?
Ask for something running that you can inspect or use yourself, rather than a demo environment or a client under confidentiality. Anything you cannot verify independently is a claim, not evidence.
If you have a proposal in front of you
The ten questions above are the whole method. A second opinion on a specific proposal is a short conversation.