Over half of Fortune 500 companies consider AI a risk to business

A new report has found that over half (56.3%) of Fortune 500 companies noted AI as a potential risk factor in annual SEC filings.

Findings from AI observability and evaluation platform, Arize AI, show that there has been a staggering 473.5% increase with 281 out of the 500 companies now designating AI as a risk, compared to 49 companies the year before.

According to Arize AI, the majority of companies are more worried about the risk AI poses than utilising its benefits. In contrast to the 281 citing AI as a potential risk factor, only 108 of the Fortune 500 companies specifically mention generative AI in their annual financial reports.

“Over two-thirds of the companies mentioning generative AI do so in the context of risk of disclosures,” stated the report. The risks are associated with the use of emerging technology, as an external competitive or a security threat to the business.

Certain sectors appear to be more concerned about the disruption AI could cause to their business than others with the media and entertainment industry leading with 91.7% of media companies in the Fortune 500 citing AI as a risk.

Software and Telecom companies also appear concerned with 84.5% and 70% respectively while a relatively low percentage of automotive (18.8%), energy (37.5%) and manufacturing (39.7%) companies indicate any concern.

AI risk factors

AI risk factors identified in the annual reports of Fortune 500 companies by Arize AI range from competitive risk from the likes of Netflix to general harm in the case of Motorola and Salesforce.

Companies such as Disney have anticipated an aspect of regulatory risk, stating “Rules governing new technological developments, such as developments in generative artificial intelligence (AI), remain unsettled, and these developments may affect aspects of our existing business model, including revenue streams for the use of our IP and how we create our entertainment products.”

Elsewhere businesses are awaiting security risk from AI either in the form of data leakages or from heightened cybersecurity risk.

In 2023’s SEC filing, Biotech company Vertex Pharmaceuticals assessed the risk of inappropriate disclosure of sensitive or inaccurate information appearing in the public domain from the use of tools such as ChatGPT.

Almost two years on from the launch of generative AI tool ChatGPT and as more companies have begun to integrate the technology into business, companies are increasingly waking up to the disruption it will cause to their business, whether that be in security or competition.