Listen to the article 3 minutes This audio is automatically generated, please let us know if you have any feedback.
Dive Overview:
The rapid adoption of artificial intelligence has prompted some agricultural companies to publicly discuss potential pitfalls in implementing the technology into their operations and products.
In its latest annual report, Archer Daniels Midland highlighted that the pace of AI adoption and development in a complex regulatory environment exposes the company to technological, legal and opportunistic risks.
Morningstar equity analyst Seth Goldstein told Agriculture Dive that there aren't any imminent AI threats to ADM or other agriculture companies, but there are some scenarios that could have negative consequences.
Dive Insights:
Generative AI is rapidly transforming industries, forcing companies to address its benefits and risks.
According to a recent survey by technology platform Arize, roughly one in five Fortune 500 companies mention generative AI or large-scale language models in their annual financial reports, and roughly 70% say the technology could pose a security or competitive threat to their business.
According to the survey, the three industries most concerned about generative AI are media and entertainment, software technology and communications, but other industries such as retail, manufacturing and consumer goods have also disclosed risks to investors.
ADM's annual report noted that AI could pose data privacy and security risks, lost opportunities for innovation, deceptive or malicious communications, and potential competitive disadvantage, but Arize said many companies only list the risks, which may not accurately reflect their overall view of the technology.
In the agriculture and food sector, Goldstein said ADM and its competitors are using the generative systems to accelerate and support research and development of new flavors and ingredients that could otherwise require significant effort to develop and execute.
Goldstein also noted that the smart language system could potentially take over some of ADM's grain trading operations.
“You could replace the entire trading desk,” he said, “but again, I don't see anything imminent that would pose a potential risk.”
ADM declined a request for comment.The Coca-Cola Company has been a strong advocate of AI but has expressed some concerns about artificial intelligence in its financial filings, primarily about third-party service providers that may not follow the company's governance framework for the technology.
One of the biggest concerns food and agriculture companies have about AI is data privacy and security, with 46.9% of food retailers citing legal and regulatory issues as a major barrier to investing in AI, according to a Retail Economics survey.
