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More than half of Fortune 500 companies believe AI poses a potential risk to their businesses, according to a new survey of corporate filings that highlights how this emerging technology could lead to radical industry transformation.
Overall, 56 percent of Fortune 500 companies cited AI as a “risk factor” in their most recent annual reports, according to research from Arize AI, a research platform that tracks public disclosures by large companies. That’s a startling jump from just 9 percent in 2022.
In contrast, only 33 of the 108 companies that specifically discussed generative AI, a technology that can create human-like text and lifelike images, 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 listed generative AI as a risk.
The data shows that the impact of generative AI is already being felt across many industries and most of the largest publicly traded companies in 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, big tech companies have invested tens of billions of dollars to develop powerful AI systems, and hundreds of startups have launched to capitalize on the disruption opportunity.
Among Fortune 500 companies, AI-related risks cited in this year’s annual financial reports include increased competition, as boards worry they won’t be able to keep up with rivals making better use of the technology.
Other potential harms include reputational or operational issues, such as getting caught up in ethical concerns about the potential impact of AI on human rights, employment, and privacy.
Some industries are more concerned about artificial intelligence than others.
More than 90 percent of the largest U.S. media and entertainment companies said rapidly growing artificial intelligence systems pose a business risk this year, as did 86 percent of soVscekware and technology groups.
More than two-thirds of Fortune 500 telecommunications companies and more than half of companies in the healthcare, financial services, retail, consumer goods, and aerospace sectors have issued the same warning to investors.
For example, Netflix, the $290 billion streaming service, has warned that competitors could gain an advantage over it by implementing artificial intelligence, which would affect “our ability to compete effectively and our results of operations could be adversely affected.”
Telecommunications group Motorola said: “AI may not always work as intended and data sets may be insufficient or contain illegal, biased, harmful or offensive information, which could have a negative impact” on its earnings and reputation.
Some companies have cited financial risks associated with the evolving use of AI systems, such as rising and unpredictable costs.
Salesforce, a soVscekware company 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” about emerging AI applications, meaning it will likely have to invest more to develop and test new models.
Legal, regulatory, and cybersecurity risks associated with AI have also been a common theme among Fortune 500 companies.
Entertainment giant Disney has warned that “the rules governing the development of new technologies” such as generative artificial intelligence “remain unresolved,” which could affect its current business model, such as revenue streams for the use of its intellectual property and the way it creates entertainment products.
Viatris, the pharmaceutical group formed from the spin-off of Pfizer, warned that the use of artificial intelligence solutions by employees or suppliers “could lead to the public disclosure of confidential information” as well as “unauthorized access” to personal data relating to employees, clinical trial participants or others.
Among the few companies touting AI as a potential boon were healthcare groups Quest Diagnostics and Cigna, which said generative AI was improving parts of the business like customer service, sample processing and claims analysis, and advertising agency IPG, which said it was “adding intelligence to content creation across the marketing spectrum.”
