Investing in generative AI is a balance between risk and reward

A recent global survey from McKinsey found that leaders are looking to increase AI-related investments, but less than half have planned for the organisational risks involved.
Investing in generative AI is a balance between risk and reward

Artificial intelligence (AI) is a strategic priority for companies, but limitations in this space mean that some of the tools’ capabilities remain unknown to users, and workforces may have to begin upskilling sooner rather than later.

A global report from McKinsey found that respondents surveyed expect large reskilling efforts to address shifting talent needs.

Top generative AI risks facing organisations include inaccuracy (56%), cybersecurity (53%), intellectual property infringement (46%), and regulatory compliance (45%), the report said. Although only 32% are actively working to mitigate inaccuracy; “a smaller percentage than the 38 percent who say they mitigate cybersecurity risks”, the report says.

Survey responses were gathered in April from 1,684 participants representing a range of roles, regions, industries, and company sizes.

Embedding new technologies is a balancing act, the report emphasises, and organisations need to evaluate the possible rewards and risks from implementing AI across various functions.

“The expected business disruption from generative AI is significant, and respondents predict meaningful changes to their workforces,” the report said. However, few companies seem fully prepared for the risks that would accompany AI; just 21% of respondents said their organisations had established “policies governing employees’ use of generative AI technologies in their work.”

Companies with more clear plans for using AI are doing so without cost-cutting as the main objective. Companies deemed as AI high performers in the report are “over three times more likely than others to say their organisations will reskill more than 30% of their workforces over the next three years as a result of AI adoption.”

Additionally, respondents from AI high performers are twice as likely as others to say their organisations’ top objective for generative AI is “to create entirely new businesses or sources of revenue.”

— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.

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