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More than half of Fortune 500 companies see artificial intelligence as a potential risk to their business, according to a new survey of company filings, highlighting the emerging technology's potential for massive transformation of industries.
According to research from Arise AI, a research platform that tracks public disclosures from large companies, 56% of Fortune 500 companies cited AI as a “risk factor” in their most recent annual reports, up from just 9% in 2022.
In contrast, of the 108 companies that specifically discussed generative AI — a technology that can create human-like text and realistic images — only 33 saw it as an opportunity. In their annual reports, this group cited cost efficiencies, operational benefits and accelerated innovation as potential benefits. More than two-thirds of that group identified generative AI as a risk.
These disclosures indicate that the impact of generative AI is already being felt across industries and the majority of the largest publicly traded companies in the United States.
Predictive machine learning technology has experienced rapid growth over the past two years since OpenAI released its popular chatbot ChatGPT in November 2022. Since then, major technology companies have invested tens of billions of dollars in developing powerful AI systems, and hundreds of startups have launched to capitalize on the opportunity for disruptive innovation.
Among Fortune 500 companies, AI risks cited in annual financial reports this year include increased competition, with boards worried about not being able to keep up with rivals that are making better use of AI technology.
Other potential damages include reputational and operational issues, such as becoming embroiled in ethical concerns about AI’s potential impact on human rights, employment and privacy.
Some industries are more concerned about AI than others.
More than 90% of large U.S. media and entertainment companies said the fast-growing use of AI systems poses a business risk this year, along with 86% of software and technology companies.
More than two-thirds of Fortune 500 communications companies and more than half of healthcare, financial services, retail, consumer and aerospace companies issued similar warnings to investors.
For example, Netflix, the $290 billion streaming service, warned that competitors' adoption of AI could gain advantages over the company, which “may affect our ability to compete effectively and adversely affect our financial results.”
Communications group Motorola said: “AI may not always work as intended and data sets may be incomplete or contain information that is unlawful, biased, harmful or offensive, which could have a negative impact on our revenue and reputation.”
Some companies cited financial risks associated with evolving their use of AI systems, including rising costs and unpredictability.
Salesforce.com Inc., a $250 billion software company, said the adoption of AI “raises new ethical questions” around data collection and privacy. The company said “uncertainty” around new AI applications could affect its profit margins and that it would have to invest heavily in developing and testing new models.
AI risks around legal, regulatory and cybersecurity were also common themes across Fortune 500 companies.
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Entertainment giant Disney warned that “the rules governing the development of new technologies” such as generative AI “are still being defined,” which could disrupt existing business models, including how they generate revenue from the use of intellectual property and how entertainment products are made.
Viatris, the pharmaceutical group spun out from Pfizer, warned that the use of AI solutions by employees and suppliers “may lead to the disclosure of sensitive information” as well as “unauthorized access” to personal data about employees, clinical trial participants and others.
Among the few companies touting the potential benefits of AI are healthcare groups Quest Diagnostics and Cigna, which both say generative AI is improving operations such as customer service, sample processing and claims analysis, while advertising agency IPG says it is “adding intelligence to content creation across marketing disciplines.”
