Is That "AI-Powered" Recruitment Tool Actually Just a Bunch of Bolt-Ons In a Trench Coat?

Have you noticed that every single tool out there claims to be "AI-powered" or "AI-enhanced" lately? 

This phenomenon isn't exclusive to software, either — I dead-seriously saw an ad for an AI-enhanced toaster in a catalogue the other day.

It's safe to say this buzzword isn't going anywhere. And the challenge this creates is an interesting one...

Because if every tool out there claims to "have AI," how do you start to tell the difference between those that are genuinely investing in their own machine learning, and those who are just...a glorified ChatGPT plug-in? 

Especially in the recruitment software space, we've seen a giant uptick in this claim — with companies that never claimed to have any AI incorporated into their product prior to 2024 now saying it's AI-this and AI-that.

Something isn't adding up.

Because anyone who has actually invested in machine learning knows that it's a lengthy process — one that takes a ton of time, research, and engineering effort.

At Loxo, we know this because we're currently on our 4th generation of machine learning. We've got our own proprietary algorithms powering the artificial intelligence that works behind the scenes throughout our entire product. And it's been like that for years — not just since AI became the "cool kid." 

We've believed for a while now that the Talent Intelligence Platform (TIP) will replace the legacy ATS. And in order for a platform to be truly intelligent, it kind of helps if it leverages machine learning that was actually built for recruiters.

One thing we can all agree on: as recruitment technology evolves, it’s clear that the ATS category is becoming obsolete. Here’s why TIPs are the future — and how to tell the difference between a truly "AI-powered" TIP and a tool that relies on third-party bolt ons.

The limitations of ATS systems in today’s market

Legacy ATS systems were designed to act as databases — repositories for resumes and candidate information. While they serve as digital filing cabinets, they don’t provide proactive solutions to the challenges recruiters face today. Recently, many ATS vendors have claimed to incorporate artificial intelligence (AI) into their offerings, but these claims often fall short upon scrutiny.

Building genuine AI capabilities requires years of investment, expertise in machine learning, and sophisticated infrastructure, including knowledge graphs, algorithms, and data pipelines. Many ATS providers rely on third-party technologies, such as OpenAI or Anthropic, to add basic generative AI functions like text generation or resume parsing. While these tools have their uses, they don’t deliver the tailored, enterprise-grade AI solutions recruiters need to solve complex problems, such as intelligent candidate sourcing and ranking.

Why true artificial intelligence requires deeper investment

Developing true AI for recruitment goes far beyond embedding third-party tools. At Loxo, we’ve spent over a decade building proprietary AI solutions that are purpose-built for the hiring process. This includes ensemble methods, which combine multiple algorithms to solve specific challenges, and a custom-built knowledge graph, which powers our AI’s understanding of relationships, skills, and career trajectories.

This level of AI integration allows Loxo’s platform to do more than just surface candidate matches. It learns, adapts, and provides expert-level recommendations to recruiters. Unlike legacy ATS systems, which rely on static databases and simplistic matching logic, Loxo’s AI-driven platform provides dynamic, relevant, and continually improving results.

How Talent Intelligence Platforms surpass ATS systems

The talent intelligence platform represents an entirely new category of recruitment software. While an ATS might claim to offer “AI sourcing” or “AI matching,” these features often fall short of expectations. Here are the key differences that set talent intelligence platforms apart:

• Proprietary AI: Talent intelligence platforms like Loxo don’t outsource their AI capabilities. Instead, they build custom algorithms, deep learning models, and neural networks that are tailored to the needs of recruiters.
• Knowledge representation: AI is only as effective as the knowledge it’s built upon. Loxo’s platform incorporates a custom knowledge graph, enabling it to interpret and understand complex relationships within the data.
• Advanced functionality: True AI doesn’t just retrieve results—it ranks, recommends, and learns. For example, Loxo AI can source, rank, and recommend candidate matches for specific job opportunities, saving recruiters significant time and effort.

In contrast, ATS systems typically rely on third-party integrations or resume parsing tools that only scratch the surface of what AI can achieve. These solutions lack the depth and sophistication to address modern recruitment challenges effectively.

Loxo’s commitment to AI innovation

At Loxo, we’re proud to lead the charge in AI-driven recruitment. Our fourth-generation Loxo AI has been designed to automate sourcing, ranking, and recommending candidates with unparalleled accuracy and efficiency. These advancements are the result of years of research and development, with a focus on creating expert systems that deliver tangible value to recruiters.

While many ATS providers are just beginning to explore AI, Loxo is already delivering results. By combining state-of-the-art technology with a deep understanding of recruiters’ needs, we’re helping organizations streamline their hiring processes and make smarter, faster decisions.

The future of recruitment technology

The recruitment industry is on the cusp of a major transformation, with AI-powered talent intelligence platforms leading the way. As these platforms mature, they will continue to outpace traditional ATS systems in terms of functionality, efficiency, and effectiveness.

Recruiters looking to stay ahead in this rapidly changing landscape should ask critical questions when evaluating software providers. Is the AI proprietary? Does it leverage deep learning and neural networks? Can it provide actionable insights beyond basic text generation?

At Loxo, we believe that true AI is built, not borrowed — and we’re excited to continue pushing the boundaries of what’s possible in recruitment technology.

This is part of a content series from our founder, Matt Chambers — 100 Reasons the TIP Will Replace the ATS. If you're interested to learn more or watch the videos, follow him on LinkedIn or stay up-to-date on the series here.