Nvidia and Other Tech Giants Submit AI Risk Reports to SEC to Avoid Litigation Targets

Bloomberg reports that several technology companies, including Microsoft, Google, and Nvidia, have submitted risk reports related to the field of artificial intelligence to the U.S. Securities and Exchange Commission (SEC), aiming to warn their investors to avoid facing legal action from shareholders in case potential problems arise. The report indicates that dozens of technology companies have issued or updated AI-related risk warnings in their financial reports and submitted them to the SEC, emphasizing that even with the robust development of AI, the companies may still suffer poor financial performance due to potential regulatory or litigation issues, leading to losses for their investors. The companies that have submitted warnings include Microsoft, Google, Nvidia, Meta, Adobe, Dell, Oracle, and Uber, among others. Specifically, the warnings emphasized by each company are as follows:

Meta: AI could be used to create false information during elections, confusing users.
Microsoft: The company could face copyright claims related to AI training and content output.
Alphabet: AI tools could negatively impact human rights, privacy, employment, or other social issues, leading to lawsuits or financial losses.
Adobe: The prevalence of AI could disrupt the labor market and the public’s demand for existing software (Photoshop).
Nvidia: Concerns that the misuse of AI could lead to restrictions on its products in various countries.

In fact, Microsoft is indeed engaged in legal action with The New York Times, which accuses the former and OpenAI of illegally using its newspaper content for profit without permission, with the potential claim amount estimated to be several billion dollars. Meanwhile, Google is also investigating whether OpenAI has improperly used YouTube content for its product training, emphasizing that even the company cannot violate its terms of service.

The purpose of submitting these risk reports is to face their investors and describe potential problems to prevent shareholders from initiating lawsuits against the company in case of investment losses. When disclosing risks, companies tend to follow the practices of their peers because if a company does not disclose a risk that its peers have already disclosed, it may become the target of shareholder litigation. As Nvidia stated, its chips have become a bargaining chip in the U.S.-China power struggle, with President Biden signing an executive order last year to restrict chip exports to China.

Last week, Taiwan’s Financial Supervisory Commission also issued “Guidelines for the Use of Artificial Intelligence in the Financial Industry,” providing guidance on risk management and customer privacy protection. Despite concerns about the risks of AI, the aforementioned companies are still stepping up their investments in the AI field to avoid falling behind their peers. A few days ago, Meta just opened a position for Generative AI (GenAI) personnel; Nvidia also revealed its latest supercomputer architecture, Blackwell, dedicated to large-scale AI computing applications, at COMPUTEX 2024 last month.