Tech giants like Nvidia submit AI risk reports to SEC to avoid becoming litigation targets

Bloomberg reported that several tech companies including Microsoft, Google, and Nvidia have submitted risk reports to the U.S. Securities and Exchange Commission (SEC) regarding the field of artificial intelligence. The purpose of these reports is to warn their investors and avoid potential legal actions from shareholders in case of issues arising.

Tech Giants Submit AI Risk Reports to SEC

Reports indicate that dozens of tech companies have issued or updated AI-related risk warnings in their financial reports and submitted them to the SEC, emphasizing that despite the rapid development of AI, these companies may still face potential regulatory or litigation risks, leading to poor financial performance and losses for their investors.

Companies that have submitted warnings include Microsoft, Google, Nvidia, Meta, Adobe, Dell, Oracle, and Uber. Specifically, here are the warnings highlighted by each company:

• Meta: AI may be used to create false information during elections, confusing users
• Microsoft: States that the company may face copyright claims related to AI training and output content
• Alphabet: AI tools may have negative impacts on human rights, privacy, employment, or other social issues, leading to litigation or financial losses
• Adobe: The proliferation of AI may disrupt the labor market and the demand for existing software like Photoshop
• Nvidia: Concerned that the misuse of AI could lead to restrictions on its products in various countries

In fact, Microsoft is currently engaged in a legal battle with The New York Times, which accuses the former of illegally using its newspaper content in collaboration with OpenAI for profit without permission, with potential damages estimated to be in the billions of dollars.

Crisis in Media and Publishing Industry? The New York Times Sues OpenAI and Microsoft for Massive Copyright Infringement

Meanwhile, Google is investigating whether OpenAI improperly used YouTube content for its product training, emphasizing that even the company cannot violate its terms of service.

Google CEO Sundar Pichai to Investigate OpenAI's Improper Use of YouTube Content

It is reported that the intention behind submitting these risk reports is to address their investors and describe potential issues to prevent shareholders from suing the company in case of investment losses:

When companies disclose risks, they often tend to follow the practices of their peers, as failing to disclose risks that peers have disclosed could make the company a target for shareholder litigation.

All Parties Strengthen AI Restriction Measures

As Nvidia mentioned, its chips have become a bargaining chip in the US-China rivalry, with President Biden having previously imposed restrictions on chip exports to China through executive orders last year.

US-China Rivalry Extends to AI Industry, OpenAI Terminates API Services to China

Last week, the Financial Supervisory Commission of Taiwan also issued the "Guidelines for Financial Industry's Use of Artificial Intelligence," providing guiding principles on risk management and customer privacy protection.

Discrepancy Between Risk and Investment

Despite emphasizing concerns about the risks of AI, the aforementioned companies are stepping up investments in the AI field to avoid falling behind their competitors.

Just a few days ago, Meta posted a job opening for a generative AI GenAI personnel; while Nvidia unveiled its latest supercomputer architecture Blackwell at COMPUTEX 2024 last month, designed for large-scale AI computing applications.