Corporate Execs and Board Members Are Increasingly Seeing AI as a Risk To Their Business
No company wants to follow in the steps of Chegg’s 90% decline since the release of ChatGPT — as 56% of Fortune 500 companies now view AI as a potential threat to their businesses, according to a recent analysis of corporate filings. It’s a staggering jump from just 9% in 2022 — and a clear sign that the disruptive power of AI is no longer a distant prospect but an urgent reality.
Risky business: The rapid rise of generative AI, with its ability to create humanlike text and images, has companies scrambling to assess the risks. Over 90% of the largest US media and entertainment companies flagged AI as a business risk this year, along with 86% of software and tech firms. More than two-thirds of Fortune 500 telecom companies and over half of healthcare, financial services, retail, consumer, and aerospace companies issued similar warnings to investors.
- Netflix warns that AI-savvy competitors could gain an advantage, potentially impacting its ability to compete effectively and hurting its bottom line.
- Viatris warns that employees’ or suppliers’ use of AI solutions “could lead to the public disclosure of confidential information” and “unauthorized access” to personal data (FT).
- Salesforce, despite its own AI initiatives, acknowledges that the technology presents emerging ethical issues around data privacy and could strain its profit margins due to the uncertainty surrounding new AI applications.
AI vs. The Boardroom
As AI’s influence grows, board members are scrambling to educate themselves and develop strategies to navigate this uncharted territory. Some are turning to staged exercises, like listening to AI-generated speeches mimicking their CEOs, to better grasp the technology’s potential impact. Others are seeking guidance from AI experts and attending conferences to stay ahead of the curve.
- A recent survey found that 95% of directors believe increased AI adoption will affect their businesses, yet 28% said it wasn’t regularly discussed in the boardroom.
- Logitech’s board has made AI governance a top priority, walking through its framework and bringing in experts to help directors understand how AI affects the company’s business.
Evolve or dissolve: While the risks are real, so too are the opportunities. Companies that fail to embrace AI risk being left behind by more agile competitors. As Clara Shih, CEO of Salesforce’s AI division, puts it: “AI is a moving target. Every week there are new models being open sourced, there’s new research papers being published, and the models are getting more powerful” (WSJ). For corporate leaders, the message is clear: adapt or perish in the age of AI.
