ANALYSIS: AI, SV 150 Write Themselves Into SEC Risk Factors (1)

The era of the intelligent machine, or artificial intelligence, abruptly arrived late last year with the launch of ChatGPT—and public companies are wrestling with what material risks AI poses and how to disclose those risks in their SEC filings. What could go wrong when AI commits blunders like making up facts, inventing legal precedent, or amplifying bias? The SEC likely expects companies to disclose such risks.

A Bloomberg Law review of annual reports on Form 10-K filed within the past 12 months found 399 extracted risk factor excerpts mentioning artificial intelligence. These disclosures were made by 287 of the approximately ...