How will AI affect corporate strategy?
AI and corporate strategy debates are heating up in boardrooms and executive suites worldwide. The big question everyone is asking is how will AI affect my business?
The pace of change around AI has stunned most people who are paying attention.
A year ago, most company directors had little knowledge of AI and how it could affect their business. Now, the picture has changed.
Questions have flared over how AI affects the job market, whether AI should be trusted, and if companies should introduce AI policies so staff and customers know the businesses approach to using AI.
For corporate leaders, the current need for rules is a problem; without widespread standards, many localised alternatives will spring up to fill the holes.
This is tough for leaders to navigate.
AI and corporate strategy – what’s the latest?
There are two things corporate leaders should be concerned about.
1: Investors are creating their own AI policies.
2: Governments are not.
Investors are making their own rules
For example, Norway’s oil fund, the world’s largest sovereign wealth fund, announced it was creating its own guidelines about the ethical use of AI.
These guidelines would apply to the 9,000+ companies it invests in, chief executive Nicolai Tangen confirmed to the Financial Times.
He suggested that the move was in response to a lack of initiative from governments on official regulations for AI.
“We think authorities and governments should regulate. We are not seeing a pipeline of regulation coming yet,” he said.
The regulation of AI
Regulation around AI is scarce and disjointed at best right now. From the far east to Silicon Valley, governments have only begun to open debates on regulating AI, and nothing concrete has emerged yet.
This is understandable to a certain degree. After all, AI, as we know it now, is new; the capabilities are fresh. But there are fears that it will be long-term.
American NBC analyst Ross Sorkin expressed serious doubt of standardised domestic AI regulations – never mind international ones – on US television this week, comparing it to the continuing struggle to regulate social media 20 years after it emerged.
So, what should corporate leaders know?
Firstly, your company could soon take cues on AI standards from many different sources.
Governments may bring in laws, but investors may also have their own standards.
And, if AI’s revolutionary capabilities are anything to go by, its revolutionary impact on corporate strategy will be a something to keep an eye on.
That brings us to the second point: strategy.
If your company will be affected in any way by emerging AI, it would be wise to implement a strategy if you haven’t already.
The strategy sets the tone and highlights the goals. Without one, your organisation is ‘playing it by ear’. AI is not the topic for that kind of approach.
Moreover, investors may quickly look for your AI strategy in the short to medium term, the same way they look for ESG strategies now.
Having a strategy tells investors that you have looked to the future, pinpointed where AI fits, and established the boundaries and assessment parameters.
As with any other topic, this information gives stakeholders confidence.