One in five Fortune 500 companies mention generative AI in their annual financial reports, new analysis found, but not necessarily for good reasons.

In the most recent financial reports as of May 2024, 108 US-based Fortune 500 companies cited generative AI in their financial reports, an increase of 250.1% since 2022, new analysis from Arize reveals.

However, 281 companies cited the emerging technology as a potential risk factor, an increase of 473.5% from 2022.

Over half (64.6%) of Fortune 500 companies mentioned AI as a whole in their most recent annual report.

Over two-thirds (69.4%) mentioning generative AI do so in the context of risk. These cited risks ranged from general harms associated with the technology, risks of losing out to competitors, regulatory compliance, and security risks.

Companies are required to mention potential risks in their financial reports, so this could explain why these companies are pressed to discuss the less than savoury aspects of AI.

While some of these risks related to failing to achieve their AI goals or keep pace with competitors, others were about AI bias and the ethical integration of AI into their systems.

“AI may not always operate as intended and datasets may be insufficient or contain illegal, biased, harmful or offensive information, which could negatively impact our results of operations, business reputation or customers’ acceptance of our AI offerings,” Motorola’s financial report read.

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On the other hand, businesses were concerned that new governing rules for emerging technology could effect existing business models, a concern cited by Disney.

Basic security concerns, such as heightened risk of data leakage, were also cited, with specific reference to ChatGPT by Vertex.

Still, just shy of a third (31%) of companies that did discuss generative AI cited its benefits, missing out on an opportunity to comfort investors on their push for AI adoption.

Software and Tech companies had the most mentions of generative AI, while media and entertainment companies had the most mentions of AI risk by disclosure (91.7%), followed by software and technology (86.4%).