What do investors need to know about AI risks?

8 minutes ago

What do investors need to know about AI risks? A few thoughts following a workshop I led at Principles for Responsible Investment. Here is a link to the full blog post about the workshop on the PRI blog. ➤ AI is booming. Most companies already employ AI and investments in AI are on the rise. It is likely that the vast majority of companies will use AI in the coming years. ➤ AI presents many environmental and social (ESG) risks. Examples include exacerbating social inequalities, disrupting democratic processes, and high carbon emissions. Responsible AI is a part of ESG. ➤ Regulation efforts are picking up steam, and some are already in effect. ➤ Here are three approaches to evaluate the environmental and social risks that a particular AI system/company poses: 1. By application type - assign coarse grain risk levels based on the application type following the risk classification presented in the EU AI Act. 2. Evaluate the company's responsible AI maturity - companies that develop and deploy AI responsibly are more likely to detect AI ethics problems and fix them. 3. Third-party evaluation - for mature companies, consider using third-party auditors with relevant technical, ethical, and legal expertise. ➤ Thank you to Daram Pandian who co-authored this blog post with me, to Peter Dunbar, CFA who invited me to lead this workshop, to Eline Sleurink who helped organize, and to the workshop's participants for a wonderful discussion.

Here is the link to the discussion on LinkedIn

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