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More Firms Warn Investors of AI Risks

By Kim S. Nash

 

Hello. As corporate use of AI surges, more companies are warning investors of the security and privacy risks that come with the technology.

Among the S&P 500, 72% cited at least one AI-related risk in filings with the Securities and Exchange Commission this year. That’s up from 58% that did so last year and just 12% in 2023, according to new research from the Conference Board.

This fraught landscape puts more responsibilities on chief information security officers, who are being called on by the C-suite and boards to explain the cyber side effects of AI projects, as we reported Wednesday.

Scroll down for more details about the Conference Board study, along with other news.

 

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More Cyber News

PHOTO: ANUSHREE FADNAVIS/REUTERS

Concerted cloud attacks: A hacker group known as the Crimson Collective is targeting cloud systems from Amazon Web Services. The group said it conducted a recent cyberattck against tech provider Red Hat, with the campaign coming at AWS. (Bleeping Computer)

Sales are down at U.K. car dealership Vertu Motors after a hack led to key supplier Jaguar Land Rover to stop production of its vehicles for six weeks. Vertu, which sells new and used cars, said it could see up to $7.4 million in lost profit stemming from the JLR cyberattack. Vertu is considering making a claim on its business insurance, Chief Executive Robert Forrester said. (Reuters)

 

Newsletter Extra: Naming AI Risks

Potential harm to a company's reputation is by the far the most-cited risk related to AI among the S&P 500, with 191 firms naming it in their 10-K filings, the Conference Board said. That includes harm from AI project failures and mishandling sensitive information. 

Rounding out the risk list are the following: 

2. Cybersecurity

3. Legal and regulatory

4. Intellectual property

5. Privacy

Looking into the future, the environmental footprint of a company's core AI models and algorithms is likely to become a material risk, the Conference Board said. Businesses will have to monitor data-center emissions and cooling-related water use, the board said. 

—Kim S. Nash

 

About Us

The WSJ Pro Cybersecurity team is Deputy Bureau Chief Kim S. Nash and reporters Angus Loten, James Rundle and Catherine Stupp. Follow us on X @WSJCyber. Reach the team by replying to any newsletter you receive or by emailing Kim at kim.nash@wsj.com.

 
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