The use of artificial intelligence (AI) is gaining traction with investors and corporations investing heavily into the space, particularly generative AI (GAI), suggested to potentially add as much as $4.4 trillion annually to the global economy, according to a recent report by Sheppard Mullin Richter & Hampton LLP. This significant financial commitment has seen some companies investing tens or even hundreds of millions of dollars into GAI.
Whether a corporation is building its own AI technology and training their own AI models, or utilizing third party tools, several key areas of concern need to be considered by corporate boards as they navigate the potential minefield of risks associated with AI deployment.
- Risk Oversight in AI
As AI becomes increasingly adopted within corporations, board members will need to be familiar with the technology and how it works to properly oversee its risks. This starts with understanding the technology, its utility, and potential pitfalls. - Transparency in AI Processes
For AI to be considered reliable and trustworthy, it needs to be transparent. This calls for making AI operational processes accessible and comprehensible to a variety of relevant stakeholders, from internal staff to regulatory bodies. - Data Integrity
The integrity of the data being fed into an AI system can significantly impact its performance and results. Effective data management, therefore, becomes imperative in ensuring the accuracy and reliability of the AI system. - Third-Party Vendor Management
Many corporations leverage third-party tools and services in their AI solutions. In such cases, an effective third-party vendor management plan needs to be implemented to oversee the collaboration and mitigate associated risks. - Legal Compliance
From dealing with data privacy issues to adhering to regulatory standards, legal compliance is a key concern when introducing AI into any corporate environment. Boards will, therefore, need to be well-versed in all applicable rules and regulations relating to AI.
While this new frontier of AI technology certainly presents great opportunities for innovation and revenue growth, it’s crucial that corporate boards stay well-informed and prepared to manage any potential risks effectively.