Majority of US Corporations Acknowledge AI Risks in Disclosures

The Growing Concern of AI Risks in Major Corporations

In a recent report published by The Conference Board, a significant shift has been observed in how U.S. corporations perceive the risks associated with artificial intelligence (AI). As of October 2025, an astonishing 72% of S&P 500 companies have flagged AI as a material risk within their public disclosures. This marks a remarkable increase from a mere 12% in 2023, revealing a rapid evolution in the understanding of AI's implications on business operations.

The recognition of AI risks comes as boards of directors and corporate executives increasingly brace for potential challenges that could affect their reputations, regulatory compliance, and operational efficiency. It highlights that AI is no longer viewed as an experimental technology; instead, it has become integral to business strategies, carrying significant risks that require careful management.

The Key Risks Identified

1. Reputational Risks: The most pressing concern among corporations is reputational risk. Approximately 38% of companies cited this type of risk, indicating that failures in AI projects or issues with consumer-facing applications could severely undermine brand trust. Missteps such as service disruptions or errors in AI-generated responses could prompt widespread backlash from customers, leading to loss of business and tarnished reputations.

2. Cybersecurity Risks: Following closely, around 20% of firms highlighted the cybersecurity risks associated with AI. AI's growth has broadened the attack surfaces for potential breaches while equipping adversaries with more sophisticated methods for cyberattacks. This has raised alarms among companies dependent on digital interfaces for their operations, as AI can exacerbate vulnerabilities both internally and externally.

3. Legal and Regulatory Risks: Legal challenges and compliance issues surrounding AI have emerged as persistent themes in corporate disclosures. As AI regulations evolve, companies struggle with compliance and the potential for litigation if they fail to meet new standards. This is particularly critical when handling sensitive data which could draw regulatory scrutiny.

Sector-Specific Insights

The report reveals that certain sectors are particularly impacted by the recognition of AI risks. Industries such as finance, healthcare, and manufacturing have shown significant hikes in AI-related disclosures. For instance, in finance, there was an increase from 14 to 63 firms acknowledging AI risks. The stakes are high; financial and healthcare sectors face regulatory concerns tied to data sensitivity, while manufacturing is rapidly adopting robotics and automation technologies.

Emerging Risks

Moreover, additional emerging risks such as intellectual property theft, privacy issues, and technology adoption pitfalls are beginning to surface in corporate communications. Companies are increasingly aware of the complexities surrounding intellectual property concerning AI training data, leading to heightened caution in their strategic deployments.

The Future Landscape

Looking ahead, business leaders are urged to integrate AI governance with the same discipline and seriousness as financial and operational strategies. The objective is to not only shield their organizations from potential risks but also to maintain transparency and trust with stakeholders amid an increasingly complex landscape.

Andrew Jones, a principal researcher at The Conference Board, emphasizes this transition, stating, "A clear theme has emerged across the disclosures; Companies are genuinely worried about AI's impact on reputation, security, and compliance."

As artificial intelligence continues to shape the future landscape of corporate America, its acceptance as a pivotal player cannot be overstated. The significant rise in reported risks reflects a shift in corporate attitudes and denotes a broader understanding of AI's potential pitfalls alongside its benefits.

With industries steering towards advanced technological integrations, ongoing vigilance and adaptive strategies will be crucial in navigating the intricate relationship between innovation and risk management.