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Mitigating AI Risk In Light of Increasing Regulatory and Shareholder Scrutiny
Driven by promises of increased efficiency and innovation, companies spanning a wide variety of industries are rapidly adopting and investing in artificial intelligence (AI). Public companies have now started to include AI-specific risk disclosures in their routine Securities & Exchange Commission (SEC) filings, and many have issued other public statements about how they utilize AI. The explosion of interest in AI has also spurred the attention of the SEC and private shareholder plaintiffs. In the past year alone, the SEC brought several enforcement actions and shareholder plaintiffs filed numerous securities class actions focusing on AI-related statements and disclosures.
Companies should continue to closely consider their public statements related to AI and implement appropriate precautions when discussing their AI initiatives.
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