When it comes to generative artificial intelligence, major companies are more concerned about risks than rewards.
More than two-thirds, or 69.4%, of Fortune 500 companies that mentioned gen AI in their latest annual reports did so in the context of risk disclosures, including risks from the use of the technology as well as competitive and security threats, according to a recent report from research firm Arize AI. Meanwhile, just 30.6% touted the benefits and uses of gen AI.
“If annual reports of the Fortune 500 make one thing clear, it’s that the impact of generative AI is being felt across a wide array of industries — even those not yet embracing the technology,” the report said. “Given that most mentions of AI are as a risk factor, there is a real opportunity for enterprises to stand out by highlighting their innovation and providing context on how they are using generative AI.”
On the whole, 281 Fortune 500 companies cited AI as a potential risk factor in their annual financial reports, Arize found — a 473.5% rise from the prior year. That’s more than five times the rate of increase in disclosures of cyber and information security risk factors between 2010 and 2012.
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AI has seen an explosive rise in recent years, with companies across industries from retailers to banks adopting the burgeoning tech. Almost two-thirds of Fortune 500 companies mention AI in their most recent annual report, with more than one-fifth of the firms specifically reference gen AI.
Software and technology firms naturally led the way in terms of mentions of gen AI and large language models, followed by the financial services and media and entertainment industries.
AI risk disclosures were different, however. Almost all (91.7%) media and entertainment firms within the Fortune 500 disclosed AI risks in their latest annual reports. Software and tech were second, and then telecommunications.