AI is all over the place as of late—and which means so is AI danger.
Amongst S&P 500 firms, 72% talked about AI as a material risk on their Kind 10-Ks this yr, the Convention Board discovered, up from 58% final yr and 12% in 2023. The shift is reflective of how AI use inside enterprise has matured from the experimental to the widespread, the group wrote in a report. (The Convention Board’s report defines “AI” broadly, together with not solely LLMs but in addition robotics, automation, machine studying, and different forms of AI.)
The businesses more than likely to reveal AI danger have been these in “frontline adopter” industries, such because the finance, healthcare, industrial, IT, and shopper discretionary sectors.
S&P firms have been most involved in regards to the reputational dangers of AI, the Convention Board reported; 38% of them disclosed potential reputational threats from AI on their 10-Ks. Forty-five firms talked about “implementation and adoption” dangers, corresponding to overpromising on AI tasks or AI not assembly expectations, whereas 42 said that consumer-facing AI was a danger. Different reputational dangers firms talked about included privateness and information dangers, hallucinations, aggressive threats, and points with bias and equity.
One in 5 S&P firms talked about AI-related threats to cybersecurity as a danger on annual filings. Whereas 40 firms merely said that cybersecurity basically was a danger, 18 known as out third get together or vendor dangers, and 17 mentioned data breaches have been a danger.
Corporations additionally foresaw potential compliance risks from AI. Forty-one listed “evolving regulation and uncertainty” as a danger space, and a few particularly referred to the EU AI Act, which has steep penalties for noncompliance.
This report was originally published by CFO Brew.
