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A survey of annual reports from the biggest U.S. corporations are increasingly highlighting artificial intelligence as a possible risk factor. <\/p>\n
According to a report from research firm Arize AI<\/a>, the number of Fortune 500 companies<\/a> that cited AI as a risk hit 281. That represents 56.2% of the companies and a 473.5% increase from the prior year, when just 49 companies flagged AI risks.<\/p>\n \u201cIf annual reports of the Fortune 500 make one thing clear, it\u2019s that the impact of generative AI is being felt across a wide array of industries\u2014even those not yet embracing the technology,\u201d the report said. \u201cGiven that most mentions of AI are as a risk factor, there is a real opportunity for enterprises to stand out by highlighting their innovation and providing context on how they are using generative AI.\u201d<\/p>\n To be sure, the jump in warnings also coincides with the explosion of awareness and interest in AI after OpenAI\u2019s release of ChatGPT in late 2022. The number of companies that made any mention of AI leapt 152% to 323.<\/p>\n Now that AI is fully on corporate America\u2019s radar, the risks and opportunities are coming into focus, with companies disclosing where they see potential downside coming from.<\/p>\n But certain companies are more worried than others. Leading the way was the media and entertainment industry, with 91.7% of Fortune 500 companies in that sector citing AI risks, according to Arise. That\u2019s as AI has rippled through the industry as performers and companies look to guard against<\/a> the new technology.<\/p>\n \u201cNew technological developments, including the development and use of generative artificial intelligence, are rapidly evolving,\u201d streaming leader Netflix said in its annual report<\/a>. \u201cIf our competitors gain an advantage by using such technologies, our ability to compete effectively and our results of operations could be adversely impacted.\u201d<\/p>\n Hollywood giant Disney said<\/a> rules governing new technologies like generative AI are \u201cunsettled,\u201d and eventually could affect revenue streams for the use of its intellectual property and how it creates entertainment products.<\/p>\n Arise said 86.4% of software and tech companies, 70% of telecoms, 65.1% of healthcare companies, 62.7% of financials, and 60% of retailers also warned.<\/p>\n By contrast, just 18.8% of automotive companies flagged AI risks, along with 37.3% of energy firms and 39.7% of manufacturers.<\/p>\n The warnings also came from companies that are incorporating AI into their products. Motorola said<\/a> \u201cAI may not always operate as intended and datasets may be insufficient or contain illegal, biased, harmful or offensive information, which could negatively impact our results of operations, business reputation or customers\u2019 acceptance of our AI offerings.\u201d<\/p>\n Salesforce pointed<\/a> to AI and its Customer 360 platform, which provides information about customers\u2019 customers: \u201cIf we enable or offer solutions that draw controversy due to their perceived or actual impact on human rights, privacy, employment, or in other social contexts, we may experience new or enhanced governmental or regulatory scrutiny, brand or reputational harm, competitive harm or legal liability.\u201d<\/p>\n AI was also flagged as a risk when it comes to cybersecurity and data leaks. In fact, the recent Def Con security conference<\/a> highlighted the importance of AI in cybersecurity. <\/p>\n Meanwhile, a\u00a0study<\/a>\u00a0published in the Journal of Hospitality Market and Management in June found consumers were less interested<\/a> in purchasing an item if it was labeled with the term \u201cAI.\u201d<\/p>\n Consumers need to be convinced of AI\u2019s benefits in a particular product, according to Dogan Gursoy, hospitality management professor at Washington State University\u2019s Carson College of Business and one of the study\u2019s authors. <\/p>\n