AI ChatRoom: Artificial Intelligence and the SEC
DLA Piper presents AI ChatRoom, a captivating series of conversational videos that helps businesses understand the rapidly evolving landscape of Artificial Intelligence (AI) laws and regulations. In this video, Danny Tobey moderates a discussion between Brent Bernell and Era Anagnosti, exploring the perspectives of the U.S. Securities and Exchange Commission (SEC) on AI, how AI has become a board level issue, reporting obligations related to AI, and the regulatory challenges and opportunities.
The participants discuss whether the SEC is prepared for AI, noting that the current onus is on public companies to assess how AI is affecting their operations, and whether or not they need to make any disclosures. Both public and private companies need to know the risks involved in AI, and public companies also need to be aware of the regulatory environment and disclosure requirements.
Boilerplate disclosure should be avoided, as it is not popular with the SEC and does not actually help investors to make decisions. Erroneously classing actual risk as hypothetical risk is another pitfall to look out for.
When AI is a very uncertain new technology, companies should consider whether the information will make a difference to how investors behave, and whether it is relevant to the enterprise as a whole. Companies should assess whether they have been “good corporate citizens”, and how that affects their risk profile in the eyes of the regulator.
Boards of directors should be sufficiently informed about their companies’ use of AI, the risks involved and the policies in place so that they can make the right disclosures and set the right controls.
There are also many opportunities and positives inherent in the use of AI, and companies need to be “nimble” in the face of a constantly evolving environment.
DLA Piper LLP
