information from AI platforms, and this is what it said: “IR professionals should approach information
from AI platforms with a degree of caution and skep- ticism, just as they would with any other source of information. While AI can provide valuable insights and help identify patterns and trends, it is still a rela- tively new technology and is not infallible.” Adding to the list of things to consider when using
information from AI: • Understand the limitations of AI. AI algorithms are only as good as the data they are trained on, and they may not be able to account for all the nuances of a given situation. It is important to understand the limitations of AI and not rely solely on its output.
• Verify the data. It is important to verify the accuracy and reliability of the data used by the AI algorithm. Garbage in, garbage out—if the data input is flawed or biased, the AI output will also be flawed or biased.
• Use AI as a tool, not a replacement. AI can provide valuable insights and help identify patterns and trends, but it is not a substitute for human expertise and judgment. IROs should use AI as a tool to complement their own analysis and decision-making.
• Do not prompt AI platforms with material information that hasn’t been publicly disclosed. Nobody knows where this information is going. Some development-stage platforms are trying to address these issues by creating localized networks to ensure all information lives and dies on local servers.
Pressing Pause on AI Use In March 2023, Elon Musk, along with 30,000 sig- natories, published a letter calling on all AI labs to pause for six months the training of AI systems more powerful than OpenAI’s latest iteration of ChatGPT. Te reason: “Powerful AI systems should be de- veloped only once we are confident that their effects will be positive and their risks will be manageable,” the letter read. But how realistic is to call on AI developers and
entrepreneurs to press pause when society incentiv- izes companies to develop the latest and greatest technologies at breakneck speed?
16 SPRING 2 0 2 3 ■ IR UPDAT E
So I asked ChatGPT to identify the potential dangers of using AI for IR. Following is what it said: • Lack of Transparency: AI algorithms can be opaque, making it difficult to understand how they make decisions. Tis lack of transparency can lead to distrust among investors who may feel that they are not getting all the information they need to make informed decisions.
• Bias: AI systems can be biased based on the data they are trained on. If the data used to train the AI system is biased, the system’s output may also be biased, leading to incorrect or incomplete information being presented to investors.
• Misinterpretation: AI systems can misinterpret data or make incorrect predictions based on incomplete or inaccurate data. This can lead to investors making decisions based on faulty information.
• Cybersecurity risks: AI systems can be vulnerable to cyberattacks, which can compromise the integrity and confidentiality of sensitive investor information. Tis can lead to significant financial losses and damage to the company’s reputation.
• Overreliance: Investors may become overly reliant on AI systems and fail to conduct their own analysis, leading to a lack of critical thinking and potentially poor investment decisions.
More negative consequences of AI will soon
come to fruition. In a letter dated April 2023 from the Securities and Exchange Commission (SEC) Investor Advisory Committee to SEC Chair Gary Gensler, several blind spots are noted when invest- ment advisors use AI to determine asset allocation for their clients. Bias and discrimination are among the greatest concerns expressed in the letter. Te same can be said about how AI is leveraged to
communicate with investors. If AI programs merely reflect the preferences and interests of management teams, how do IROs help ensure transparency and adherence to ethics when algorithms are stacked against our own moral codes? Te answer: human intervention.
Evan Pondel, IRC, is Founder of Triunfo Partners;
epondel@triunfopartners.com.
niri.org/ irupdate
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