Insights
What Are Some of the Key Business Risks Associated with Predictive AI?
Posted March 28th, 2024 in Articles
Like all new technologies, predictive artificial intelligence (AI) presents both opportunities and risks. When seeking to leverage predictive AI, companies must consider both. When companies seek to seize opportunities without considering the risks involved, not only can they end up with a negative return on investment (ROI), but they will often expose themselves to liability as well.
In many industries, we are seeing an arms race to adopt predictive AI technologies. Unfortunately, this means that many companies are implementing predictive AI tools without considering the relevant risks (and, in many cases, without considering all of the potential benefits). With this in mind, what are the risks your company should be considering if you are considering an investment in predictive AI in 2024? Here are five critical examples:
Key Business Risk #1: Predictive AI Tools Can Quickly Become Outdated
With the rapid pace of innovation in the artificial intelligence field, predictive AI tools can quickly become outdated. Unless companies negotiate software updates into their license agreements, staying current with the state of the art can get expensive very quickly as well.
Key Business Risk #2: Predictive AI Tools Can Get it Wrong
By its nature, predictive AI is fallible. Not all predictions that an AI platform makes will be accurate, and if companies fail to account for this (or fail to account for it sufficiently), they can find themselves facing unanticipated losses and liability.
Key Business Risk #3: Clients and Customers May Not Understand Predictive AI’s Limitations
Related to what we just discussed, clients and customers may not understand predictive AI’s limitations. They may assume that predictive AI will always be accurate—and this may lead to unreasonable expectations. Of course, even if a customer’s expectations are unreasonable, customer dissatisfaction is still far from ideal. Not only can it lead to a loss of future business, but, in some cases, it can lead to litigation as well.
Key Business Risk #4: Developers May Oversell Their Predictive AI Tools’ Capabilities
When investing in predictive AI, it is critical that companies ensure they are making informed decisions. In an effort to gain market share, developers may oversell their tools’ capabilities. By working with abusiness consultant who is familiar with the predictive AI market, companies can ensure that they aren’t being oversold.
Key Business Risk #5: Companies that Rely on Predictive AI May Have Little Recourse (Unless They Protect Themselves Proactively)
Finally, since developers will usually seek to disclaim liability for their platforms’ outputs, companies may have little recourse if they (or their customers or clients) rely on a third-party predictive AI platform. To mitigate this risk, companies can—and should—work with an experienced business consultant during their negotiations (and engage legal counsel as necessary).
Speak with a Business Consultant at Mithras Investments
Do you have questions about investing in predictive AI? If so, we can help you make informed and strategic decisions. To speak with a business consultant at Mithras Investments, call us at 305-517-7911 or contact us online today.
