As Big Companies Air AI Fears, Entrepreneurs Adopt it With Gusto

Since OpenAI released its Chat GPT bot two years ago, reactions to rapidly evolving artificial intelligence (AI) applications have spawned nearly equal portions of enthusiasm and concern. Those contrasts now appear in real-life contexts, as many of the country's largest corporations air worries about the tech in their reports to shareholders, while growing numbers of entrepreneurs say using AI to launch their businesses helped them progress toward profitability faster than they could have otherwise Fretting about the potential downsides of artificial intelligence for businesses was laid bare in a report by machine-learning analysis and development platform Arize AI. Its research examined the most recent annual reports published by Fortune 500 companies, and determined 56 percent of those--a total of 281--cited emerging AI as a "risk factor" to their operation, up by over 473 percent in 2022. Meanwhile, nearly 70 percent of the yearly investor publications that specifically mentioned generative AI pointed out the negative effects it could have on future revenue--or even the business itself. The proliferation of those corporate warnings was doubtless fueled by the tech's rapid spread throughout business, and in broader public awareness thanks to ChatGPT. Overall, 324 of the 500 companies examined mentioned AI in their latest reports, compared to 128 in 2022. And the 108 companies that recently noted the risks that swiftly developing generative AI may bring was a stark contrast to the complete absence of references to the applications two years ago. What were the main reasons behind the corporate worries about AI's possible negative impacts? They ranged from computers eventually replacing humans central to Fortune 500 media, entertainment, advertising, and software businesses, to the possibility AI will permit struggling rivals to harness its power catch up to, or even surpass established sector leaders. Netflix, for example, specifically mentioned generative AI, warning "(i)f our competitors gain an advantage by using such technologies, our ability to compete effectively and our results of operations could be adversely impacted." Other fears included inadvertent leaks of proprietary and other confidential company data, potential legal hazards stemming from communications or decisions taken by machines, and various problems in the still uncharted ethical waters of creating and deploying AI. "For example, the development of AI and (our) Customer 360, the latter of which provides information regarding our customers' customers, presents emerging ethical issues," read one passage from Salesforce's annual report. It took particular note of the risk of apps provoking "controversy due to their perceived or actual impact on human rights, privacy, employment, or in other social contexts." But if the largest companies in the U.S. that were among AI's first corporate adopters are now raising precautionary questions, a report Sunday in The New York Times suggests entrepreneurs are embracing the rapidly improving technology without the same hesitations. Though largely anecdotal in nature, the article cites founders who used publicly available applications like ChatGPT and GitHub Copilot to launch their companies--in some cases in learning details about their chosen sector, or even the fundamentals of business ownership. The apps then allowed those new bosses to progress toward profitability faster by relying on the tech to "write intricate code, understand complex legal documents, create posts on social media, edit copy, and even answer payroll questions" for which they'd normally have to pay third-party providers, the Times said. Among the young companies cited was Skittenz, which Golden, Colorado emergency doctor Steven Bright founded recently to produce a variety of snazzy looking outer skins that fit over bland mittens and gloves. After finding that his fellow medical professionals could offer little advice about how to start a business, Bright told the Times he used ChatGPT to navigate typically impenetrable legal, patent, and administrative questions. He was even able to get answers to technical manufacturing questions like which dye would work best in his products. "(T)o be able to harness the whole power of the internet into a bit of a conversation gives you some reassurance," Bright said, likening the tech to "stilts to get through an obstacle-- to get through a minefield." Bright and other founders aren't alone in seeing AI's upsides for startups. According to a 2023 report by the U.S. Chamber of Commerce, 23 percent of all U.S. small businesses were already using "an AI platform," and 71 percent planned to adopt some form of the technology. In its conclusion, the Arize AI study advised big U.S. companies now expressing concerns about potential AI business risks to take inspiration from entrepreneurs who are using it successfully--then actively pursue its development in ways that reduce or eliminate future threats. "Given that most mentions of AI are as a risk factor, there is a real opportunity for enterprises to stand out by highlighting their innovation and providing context on how they are using generative AI," the study said.