The number of Fortune 500 companies identifying artificial intelligence (AI) as a risk factor has surged by 473.5% over the past year, according to Arize AI, a company specialising in machine learning observability and AI monitoring.
The findings are from Arize AI’s latest report, titled ‘The Rise of Generative AI in SEC Filings.’ The report reveals that 281 companies now flag AI risks, representing 56.2% of the Fortune 500. This new data represents a significant increase compared to the previous year, when only 49 companies highlighted AI risks.
More major companies cognizant of AI risks
Arize AI reviewed the most recent annual financial reports (10-Ks) from US-based Fortune 500 companies as of 1 May 2024, comparing these with reports from 2022. According to the report, more than two-thirds, or 66.9%, of developers and machine learning teams plan to integrate generative AI this year. Additionally, over 14% have already deployed large language models (LLMs) in practical applications.
The analysis focused on mentions of AI, machine learning, large language models, and generative AI. The findings indicate a significant increase in AI mentions in these reports, underscoring its growing role in business operations and risk management.
Several major companies have highlighted specific concerns related to AI. Motorola, for one, warned that the technology might not always perform as expected, noting that datasets could be flawed or biased, potentially harming their business results and reputation. Salesforce, meanwhile, pointed out that its Customer 360 platform could face heightened regulatory scrutiny or reputational damage if its AI solutions impact human rights, privacy, or other social issues.
In the world of media, meanwhile, streaming platform Netflix expressed concern that rapid advancements in generative AI could give competitors an edge, adversely affecting its competitive position and operational results. Elsewhere, Hollywood major Disney raised concerns about the unsettled regulations surrounding generative AI, which might impact its revenue streams and the creation of entertainment products.
Risk and reward
Over 64.6% of companies mentioned AI in their latest annual reports, with more than 20% specifically referencing generative AI. Of those, 69.4% discussed generative AI in the context of risk, either from its use or as an external competitive or security threat. The software and technology sectors lead in the number of mentions of generative AI and LLMs, while the advertising, media, and entertainment industries report the highest percentage of AI as a risk factor which is 91.7%.
The report from Arize AI recommends showcasing the benefits of generative AI alongside its risks. According to the report, only 30.6% of companies that mention generative AI discuss its advantages outside the risk section, which could be a missed opportunity to highlight the positive impact of AI on business.
Read more: DeepMind builds warning system to spot AI risks
