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The term 'snake oil' refers to technologies that are overhyped and underperforming, especially within the AI domain. An example highlighted was an AI-driven hiring tool that claimed to assess candidate suitability based on casual interviews, despite lacking evidence of its effectiveness. This instance illustrates how some AI products are marketed as revolutionary solutions without proper validation, leading to public confusion about the true capabilities of AI technologies. The book emphasizes the necessity for critical evaluation of AI claims to differentiate between genuine advancements and those that may not deliver significant value.