Jeff Berkowitz is founder and CEO of Delve, a competitive intelligence firm that helps companies navigate political and reputational risks.
Artificial intelligence is here, and it is transforming the world in ways we are only beginning to grasp. As businesses incorporate generative AI into their operations, many will find themselves in an uncharted frontier—a landscape filled with potential but also fraught with political, legal and reputational challenges.
AI’s rapid evolution has drawn the attention of Congress, foreign governments and the European Union regarding concerns about AI advancing at such a pace that they can’t keep up. This can leave businesses that rely on AI in a potentially precarious position. As someone who helps companies navigate risks, I believe that while regulators might try to narrowly regulate the technology, the rush to regulate could stifle the opportunity for AI to boost productivity. Yet, in the absence of defined rules and guardrails, businesses must make complicated ethical, privacy and other contentious decisions on their own.
Policy And Legal Questions Businesses Should Consider Before Adopting AI
Bias And Discrimination
One concern about AI is its potential to unintentionally perpetuate and amplify human bias and lead to discrimination. The Biden Administration incorporated discrimination protection into their proposed AI Bill of Rights, which puts the onus on businesses to ensure they have rigorous processes in place to detect and eliminate bias in AI system outputs. In addition, the Consumer Financial Protection Bureau, U.S. Justice Department, Equal Employment Opportunity Commission and Federal Trade Commission recently asserted their intent to fight AI bias with existing authorities.
Data Privacy
Generative AI’s need for large volumes of data could put it at odds with stringent privacy regulations, like Europe’s General Data Protection Regulation and California’s Consumer Privacy Act. Companies that fail to protect the data they collect face the risk of penalties, not to mention the potential reputational damage.
Intellectual Property Protections
The question of who owns the output of AI systems is a rapidly evolving and unsettled area of law, which leaves businesses in a legal grey zone. High-dollar lawsuit battles loom on the horizon, with some artists and data owners gearing up to challenge AI companies that use their intellectual property for training AI without proper attribution or compensation. Businesses that leverage such technologies could also face such claims and risk losing intellectual property protections for their own works.
Legal Liabilities
With increasing autonomy, AI systems pose potential real-world risks. Yet, the legal framework for handling such issues is still in its nascent stages, thus creating potential landmines for businesses that adopt such systems, such as autonomous vehicles. To mitigate those risks, companies must take extra steps to consider their potential liability and implement robust AI testing and validation procedures.
Reputational Risks Businesses Must Anticipate
I believe AI’s capabilities will permeate every sector—law, healthcare, financial services, law enforcement, energy and beyond. Companies must keep pace or risk being left behind.
This reality presents a challenge for businesses unaccustomed to navigating complex policy environments, as the rise of AI could lead to governmental and consumer ripple effects that, like many other areas of technology regulation, vary greatly from jurisdiction to jurisdiction. Businesses will have to stay abreast of this patchwork of legislative and regulatory changes and the evolving public attitudes that vary by culture and region.
Misuse of AI, either directed by the business or by employees, such as creating deepfakes or committing online crimes, can cause severe reputational damage. Such incidents can happen either because a firm’s tools were misused or the firm itself was targeted by the misuse. Every business should prepare for how AI could create a damaging viral moment for their firm.
Likewise, businesses making overstated claims about their AI’s capabilities risk backlash from consumers and regulators. The Federal Trade Commission has already warned companies against making deceptive claims about what their AI technologies can accomplish.
Businesses will also have to consider AI’s impact on their workforce. Some large employers have already indicated they could replace some human workers with AI technologies, and the growing threat of job losses due to AI could impact public sentiment of not only AI but also the companies that use it. Indeed, some thinkers fear AI poses an existential threat to humanity, so businesses developing, deploying or using AI products must keep an eye on how much traction these movements gain.
Adopt And Adapt: The Way Forward For AI In Business
From my perspective, AI will impact every sector of the economy and many aspects of our daily lives. That means AI technology will likely become entangled in the same issues already dominating political and cultural debates, including bias, racism, the environment and more. Whether your business is building its own AI-enabled tools or leveraging newly available tools built by others, you will need the ability to communicate what AI is and is not to all of your stakeholders, as well as the government entities that can impact your firm.
For businesses, the choice should not be between avoiding AI and risk falling behind or incorporating AI into core processes and face potentially immense political, legal and reputational scrutiny. Instead, businesses must fully understand what is driving this scrutiny and how your firm’s stakeholders—employees, customers, communities, investors and beyond—are likely to respond. This understanding will empower businesses to navigate this complex landscape, manage risks and fully capitalize on the opportunities presented in this rapidly evolving AI era.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
