The rapid rise of artificial intelligence has reshaped industries and captured the attention of investors. But as with previous technological booms, this excitement has led to a deceptive trend known as “AI washing”—the practice of companies overstating or misrepresenting their AI capabilities to inflate their market value and attract investment.

This phenomenon has drawn increased scrutiny from federal regulators. AI-related litigation has also grown swiftly in the private securities class action space. Data from the Cornerstone Research indicates a significant increase in these types of lawsuits, with at least twelve AI-related securities class action lawsuits filed in the first half of 2025, on track to surpass the fifteen filed in all of 2024.[1]

SUPX’s Rebranding as AI Company and Rocketing Share Price

The latest alleged culprit of AI washing is SuperX AI Technology, an interior design company headquartered in Singapore that provides interior design, fit-out, and maintenance services to residential and commercial clients in the interior design market in Hong Kong.[2]

The company, originally founded in 1998, has recently rebranded itself as an AI company specializing in server design and software solutions. SuperX AI has made a series of public announcements to support this new identity, including a collaboration with PanaAI to build an “AI supercomputing center” in Australia and the acquisition of MindEnergy, which it described as a firm dedicated to providing computing power for generative AI and deep learning. More recently, SUPX announced a new “multi-model server” series and plans for an “AI Supply Center” in Japan.

SUPX’s recent rebranding has been well received by investors.  SUPX’s shares, which trade on NASDAQ, rose over 1,700% from January 1, 2025 to September 4, 2025, giving the company, which generated only $2.9 million in revenue for FY 2024,[3] a market capitalization well in excess of $1 billion.

J Capital Research Alleges SUPX Is Empty Shell

The propriety of SUPX’s statements and valuation have now come into serious question in light of a Sept. 4, 2025 short report issued by J Capital Research USA LLC (JCap), accusing SUPX of engaging in a stock-pumping scheme. The activist short seller with a history of publishing research reports on publicly traded companies, often exposing alleged corporate fraud through deep, on-the-ground research,[4] claims that SUPX, trading at a “dizzying 472x FY2024 annual revenue,” is an “empty shell” whose AI pivot is a "pump-and-dump” orchestrated by Chinese property developers.

JCap’s report , titled “SUPX: The design and fit-out company pretending it's in AI with photoshopped logos, copied specs, and empty announcements about undisclosed related parties”, details a series of red flags:

• Ties to Chinese Property Interests: The report alleges that SUPX is backed by distressed Chinese property developers, one of whom is a convicted felon. A 10.2% stake in SUPX was reportedly handed to a vehicle for Wang Zhenhua, the founder of developer Seazen Group.
• Fabricated Products and Announcements: The firm's supposed AI products are described as "likely digitally altered images with plagiarized specifications". JCap claims that SUPX logos may have been "photoshopped onto the hardware" and that announcements of a "$200 mln 'superfactory'" and a "Japanese AI Supply Center" have shown no progress.
• Undisclosed Related Parties: The report scrutinizes SUPX's partnership with PanaAI and the acquisition of MindEnergy, which JCap alleges are "undisclosed related parties" and "empty shells". The acquisition of MindEnergy, for up to $19.8 million, was completed with "very little oversight," and the company had "no known expertise or experience in AI".
• Management Churn and Troubled Backgrounds: JCap points to a high turnover of key executives and board members, noting that the CEO and CFO recently resigned. The report alleges that key personnel have backgrounds tied to "scams, frauds, and Chinese pump-and-dump schemes". The IPO underwriter is also cited for a history of compliance issues.
• Auditor Concerns: According to JCap, SUPX has churned through three auditors in one year, which could put the company at risk of being delisted under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to investigate the auditors for two consecutive years.

Hagens Berman’s Investigation

JCap’s stunning allegations of “AI washing” have prompted an SPUX investigation by Hagens Berman into possible violations of the U.S. securities laws. As part of its probe, the firm is examining whether Super X AI misled investors about its business and products.

The investigation into Super X AI is a microcosm of a broader and more serious trend. As AI continues to dominate headlines and investment decisions, companies face increasing pressure to prove that their claims are backed by substance, not just hype. For investors, the rise of "AI washing" serves as a crucial reminder to exercise caution and due diligence when evaluating businesses that promise an AI-driven future.