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Financial Times: Major US Companies Warn of Growing Risks of AI

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London, August 19 (QNA) - More than half of the US's biggest companies see artificial intelligence (AI) as a potential risk to their businesses, Financial Times cited a new survey of corporate filings that highlights how the emerging technology could bring about sweeping industrial transformation.

The newspaper said that overall, 56 per cent of Fortune 500 companies cited AI as a "risk factor" in their most recent annual reports, according to research by Arize AI, a research platform that tracks public disclosures by large businesses. The figure is a striking jump from just 9 per cent in 2022.
It pointed out that by contrast, only 33 companies of the 108 that specifically discussed generative AI technology capable of creating humanlike text and realistic imagery saw it as an opportunity. Potential benefits include cost efficiencies, operational benefits and accelerating innovation, these groups said in their annual reports. More than two-thirds of that group specified generative AI as a risk.
The newspaper reported that the disclosures demonstrate that the impact of generative AI is already being felt across an array of industries and at the majority of the largest listed companies in the US.
It added that the predictive machine learning technology has boomed over the past two years since OpenAIs release of its popular chatbot ChatGPT in November 2022. Since then, Big Tech companies have invested tens of billions of dollars to develop powerful AI systems and hundreds of start-ups have launched to capitalise on the opportunity for disruption.
Among Fortune 500 companies, AI risks mentioned in annual financial reports this year include greater competition, as boardrooms fret they may fail to keep pace with rivals who are better exploiting the technology, the Financial Times said.
Other potential harms include reputational or operational issues, such as becoming ensnared in ethical concerns about AIs potential impact on human rights, employment and privacy, it added, noting that some industries are more worried about AI than others.

The Financial Times said that more than 90 per cent of the largest US media and entertainment companies said that fast-growing AI systems were a business risk this year, as well as 86 per cent of software and technology groups. It also said that over two-thirds of Fortune 500 telecommunications companies and more than half of healthcare, financial services, retail, consumer and aerospace companies gave the same warning to investors. For example, Netflix warned that competitors could gain an advantage over it by deploying AI, which would affect "our ability to compete effectively and our results of operations could be adversely impacted", the paper said. "AI may not always operate as intended and data sets may be insufficient or contain illegal, biased, harmful or offensive information, which could negatively impact" its earnings and reputation, the paper quoted Telecoms group Motorola as saying. Some companies cited financial risks related to the evolving use of AI systems, such as mounting and unpredictable costs, it pointed out. Salesforce, a software business valued at $250 billion, said its adoption of AI "presents emerging ethical issues" around data collection and privacy. It said its profit margins could be affected by "uncertainty" around emerging AI applications, which meant it would likely have to commit greater investment to develop and test new models. The Financial Times underlined that legal, regulatory and cyber security AI risks were also a common theme among Fortune 500 companies. Entertainment giant Disney warned that "rules governing new technology developments" like generative AI "remain unsettled", which could hit its existing business model such as revenue streams for the use of its intellectual property and how it creates entertainment products. Viatris, the pharmaceutical group that was spun out of Pfizer, warned that the use of AI solutions by employees or suppliers "could lead to the public disclosure of confidential information" as well as "unauthorised access" to personal data relating to employees, clinical trial participants or others, according to the Financial Times. Among the few companies touting AI as a potential benefit were healthcare groups Quest Diagnostics and Cigna, which said generative AI was improving parts of the business such as customer service, specimen processing and claims analysis, and advertising agency IPG, which said it was "adding intelligence to the creation of content across the marketing spectrum", the Financial Times concluded. (QNA)

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Financial Times: Major US Companies Warn of Growing Risks of AI

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