Generative AI Emerges as Key Risk for Enterprises in Q2 2023

Editorial Desk
By Editorial Desk 4 Min Read

The proliferation of generative AI tools, including OpenAI’s ChatGPT and Google Bard, has raised concerns among enterprise risk executives in the second quarter of 2023, according to a report by Gartner, Inc.

In a survey conducted by Gartner in May 2023, 249 senior enterprise risk executives were asked to identify emerging risks. Generative AI ranked as the second most frequently named risk, marking its first appearance in the top 10.

This reflects the growing public awareness and adoption of generative AI tools, as well as the wide range of potential use cases and associated risks.

The top fast-emerging risk identified by organizations in the survey was third-party viability. This was followed by financial planning uncertainty and cloud concentration risk. The risks in the top five were a mix of macroeconomic and geopolitical volatility, along with technology-related concerns such as China trade tensions.

Gartner has previously identified six risks associated with generative AI and four areas of AI regulation relevant to assurance functions. To effectively manage enterprise risk, Gartner experts emphasize the need to address three main aspects:

1. Intellectual Property

Inputting sensitive or confidential information into generative AI tools can result in it becoming part of the training set, potentially exposing it to other users. Additionally, using outputs from these tools may inadvertently infringe upon the intellectual property rights of others.

Corporate leadership should be educated on the importance of caution and transparency when using generative AI tools to mitigate intellectual property risks.

2. Data Privacy

Generative AI tools may share user information with third parties without prior notice, potentially violating privacy laws in various jurisdictions.

Regulations addressing data privacy have already been implemented in China and the EU, with proposed regulations emerging in the USA, Canada, India, and the UK. Organizations must be mindful of these regulations to ensure compliance.

3. Cybersecurity

Hackers constantly explore new technologies for vulnerabilities, and generative AI is no exception. Instances of malware and ransomware code generated by generative AI have been observed, along with “prompt injections” attacks that trick these tools into divulging sensitive information.

This has led to the industrialization of advanced phishing attacks. Robust cybersecurity measures are crucial to protect against these threats.

In addition to generative AI, the report highlights third-party viability as a significant risk. Persistently high inflation and rising interest rates can increase costs and margin pressures on third parties, potentially leading to operational suspensions or insolvency.

Risk managers should monitor the consequences of third-party viability, including the loss of key inputs and materials, flawed financial planning assumptions, and challenges outside the supply chain.

As enterprises navigate the evolving landscape of emerging risks, proactive measures and a comprehensive understanding of these risks will be essential to ensure business continuity and resilience in the face of technological advancements.

Share This Article
Leave a comment
WP2Social Auto Publish Powered By : XYZScripts.com