Dive Brief:
- More than half of Fortune 500 companies cite AI as a potential risk factor in SEC filings, the most common place to mention the technology in filings, according to an Arize AI report published Sunday.
- Nearly two-thirds of Fortune 500 companies mentioned AI in their most recent annual report, with 1 in 5 referencing generative AI specifically, Arize AI’s analysis found. Only 31% cited generative AI’s benefits or use cases outside of the risk section.
- The industries most likely to include AI in risk disclosures were media, technology, telecommunications, healthcare and financial services.
Dive Insight:
Past earnings seasons have been filled with talk of the potential upsides of adding generative AI to operations and workflows. Now, executives and enterprises are also underlining the technology’s risks.
“Most companies are still trying to figure out how to govern the use of generative AI while their [lines of business] continue to experiment with use cases that prove the value, and move some of them into production,” Gartner Distinguished VP Analyst Avivah Litan said in an email to CIO Dive.
Governing generative AI use is overwhelming for most organizations, according to Litan, which explains why businesses are now citing the technology in risk sections of annual reports.
Enthusiasm for generative AI is starting to wane this year, dropping 11 percentage points among senior executives and eight percentage points among board members, according to analysis from Deloitte, which compared two surveys from Q1 and Q3 2024.
Despite the falling enthusiasm, AI budgets are growing and the pressure is rising for CIOs to translate what’s working, what isn’t and why to their counterparts.
Leaders are navigating adoption with security and safety in mind, looking to scale quick wins and early successes. Enterprises have identified some low-risk, low-cost use cases, such as automating paper-heavy third-party risk management processes and discovering and remediating software redundancies, Litan said.
But for the vast majority of businesses, ROI is elusive and multiple roadblocks stand in the way of progress, from immature tech foundations to poor data quality and an inability to show value.
Some analysts and executives credit the ROI challenge to enterprises’ initial generative AI efforts, which may have been driven by hype rather than aligned with broader business goals and risk appetites.
