Majority of U.S. Companies See AI as a Growing Threat, Survey Finds
AInvestTuesday, Aug 20, 2024 11:00 am ET
2min read
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A recent survey reveals that more than half of large American companies view artificial intelligence (AI) as a potential risk to their business.

The survey, conducted by research platform Arize AI, analyzed public disclosures from major enterprises. Overall, 56% of Fortune 500 companies in the United States identified AI as a risk factor in their latest annual reports, a remarkable increase from 9% in 2022. Notably, the chatbot ChatGPT, which spearheaded AI industry changes, was launched in November 2022.

In contrast, out of 108 companies specifically discussing generative AI, only 33 viewed it as an opportunity. These companies cited benefits such as cost efficiency, operational improvements, and accelerated innovation. However, the remaining companies considered generative AI as a risk.

Many companies perceive heightened competition as a risk brought by AI, with executives fearing they may not keep up with competitors more adept at leveraging the technology.

A streaming giant warned that rivals might gain an advantage by deploying AI, potentially impacting its competitive efficacy and operational performance.

Besides competitive concerns, companies are worried about other potential hazards such as reputational or operational issues, including AI-induced ethical risks related to human rights, employment, and privacy.

A leading telecommunications group indicated that AI might not always perform as expected, with datasets possibly being insufficient, illegal, biased, harmful, or offensive, which could negatively affect their earnings and reputation.

Some industries are more apprehensive about AI than others. Over 90% of large American media and entertainment companies reported that rapidly growing AI systems pose a business risk this year. Similarly, 86% of software and technology groups share this view.

More than two-thirds of telecommunications companies and over half of healthcare, financial services, retail, consumer, and aerospace firms have issued similar warnings to investors.

Companies also flagged financial risks from AI, such as rising and unpredictable costs.

A software giant mentioned encountering new ethical issues with AI usage, related to data collection and privacy. The company noted its profit margins might be affected by uncertainties in emerging AI applications, necessitating further investment in developing and testing new models.

Legal, regulatory, and cybersecurity-related AI risks are also major concerns. An entertainment giant warned that the rules governing new technologies like generative AI remain undefined, which could potentially disrupt its existing business models, including revenue streams from intellectual property and entertainment product creation.

A pharmaceutical group cautioned that AI solutions used by employees or suppliers might result in unauthorized disclosure of confidential information and access to personal data related to employees, clinical trial participants, or other individuals.

Among the minority viewing AI as an opportunity, healthcare groups such as Quest Diagnostics and Cigna reported improvements in customer service, specimen handling, and claims analysis. Meanwhile, an advertising company noted that AI is adding intelligence to content creation across the marketing sector.
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