What are companies saying in risk factors about their use of AI in their business?
May 24, 2023
On May 24, 2023, the law firm, Bryan Cave Leighton Paisner (BCLP) released an analysis of recent public disclosures by companies about their use of artificial intelligence in business. While new forms of artificial intelligence and machine-learning systems, or AI, have garnered headlines in the mainstream press, many companies are evaluating its use in their businesses. Perhaps to a greater extent than with previous technological developments, companies need to consider the materiality of risks and uncertainties presented by AI.
Several companies have begun to address the implications of AI in recent 10-K and 10-Q filings, although still less than 10% of companies in the major indices (S&P 500 and Russell 3000). Some companies have included standalone risk factors, while other companies variously address AI as one of a number of factors contained in broader risk disclosures. BCLP remind companies that, as with any other risks, they should include AI in their enterprise risk management systems, to the extent material, as well as their disclosure controls and procedures.
Review the analysis on the BCLP website.