Stay up to this point with free updates
Simply register for Artificial intelligence myFT Digest – delivered straight to your inbox.
More than half of the biggest U.S. corporations see artificial intelligence as a possible risk to their business, in response to a brand new survey of corporate filings that highlights how the brand new technology could bring about sweeping industrial change.
Overall, 56 percent of Fortune 500 corporations listed AI as a “risk factor” of their most up-to-date annual reports, in response to research by Arize AI, a research platform that tracks public disclosures from large corporations. The number is a notable increase from just 9 percent in 2022.
In contrast, only 33 of the 108 corporations that specifically talked about generative AI – a technology that may create human-like text and realistic images – saw it as a possibility. The potential advantages include cost efficiencies, operational benefits and accelerated innovation, these groups said of their annual reports. More than two-thirds of that group described generative AI as a risk.
The disclosures show that the impact of generative AI is already being felt across quite a few industries and at the vast majority of the biggest publicly traded corporations within the United States.
Predictive machine learning technology has boomed over the past two years since OpenAI released its popular chatbot ChatGPT in November 2022. Since then, major technology corporations have invested tens of billions of dollars to develop powerful AI systems, and a whole bunch of startups have been founded to seize the chance for disruption.
Among the risks cited by Fortune 500 corporations on this yr's financial reports from artificial intelligence is increased competition, with boardrooms concerned that they might not give you the chance to maintain up with rivals which are higher at using the technology.
Other potential harms include reputational or operational issues, corresponding to becoming entangled in ethical concerns in regards to the potential impact of AI on human rights, employment and privacy.
Some industries are more concerned about AI than others.
More than 90 percent of the biggest U.S. media and entertainment corporations and 86 percent of software and technology corporations said that rapidly growing AI systems posed a business risk this yr.
More than two-thirds of Fortune 500 telecommunications corporations and greater than half of corporations within the healthcare, financial services, retail, consumer goods and aerospace sectors gave investors the identical warning.
For example, the $290 billion streaming service Netflix warned that competitors could gain a bonus through the usage of artificial intelligence. This would “impair our ability to compete effectively and will adversely affect our operating results.”
Telecommunications giant Motorola said: “AI may not at all times work as intended and data sets could also be inadequate or contain illegal, distorted, harmful or offensive information, which could negatively impact the corporate's revenue and fame.”
Some corporations pointed to financial risks related to the increasing use of AI systems, corresponding to rising and unpredictable costs.
Salesforce, a software company valued at $250 billion, said the adoption of AI raises “latest ethical issues” around data collection and privacy. The company said its profit margins might be hit by the “uncertainty” surrounding emerging AI applications, meaning the corporate will likely must make larger investments in developing and testing latest models.
Legal, regulatory and cybersecurity risks from AI were also a standard topic amongst Fortune 500 corporations.
Entertainment giant Disney warned that “the principles for brand spanking new technological developments” corresponding to generative AI “remain unclear.” This could impact the corporate's existing business model, corresponding to the revenue streams from the usage of its mental property and the best way it creates entertainment products.
The pharmaceutical company Viatris, which was spun off from Pfizer, warned that the usage of AI solutions by employees or suppliers may lead to “public disclosure of confidential information” and “unauthorized access” to private data of employees, participants in clinical trials or other individuals.
Among the few corporations touting artificial intelligence as a possible profit are healthcare giants Quest Diagnostics and Cigna, which said generative AI improves parts of the business corresponding to customer support, sample processing and claims evaluation, and promoting agency IPG, which said it brings intelligence to “content creation across the marketing spectrum.”
