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Dive Briefing:
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The rapid advancement of artificial intelligence has forced some agricultural companies to publicly disclose the potential pitfalls of implementing the technology into their operations and products.
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Archer-Daniels-Midland Co. highlighted: Latest Annual Report Explains how the pace of AI adoption and development in a complex regulatory environment exposes companies to technical, legal, and opportunistic risks.
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Seth Goldstein, a Morningstar equity analyst, told Agriculture Dive that while there doesn't appear to be an imminent AI threat to ADM and other agricultural companies, there are scenarios that could have adverse consequences.
Dive Insight:
Generative AI is rapidly reshaping industries, and companies are grappling with the rewards and risks it brings.
According to recent research, Technology Platform ArizeAbout one in five Fortune 500 companies mention generative AI or large-scale language models in their annual financial reports, and about 70% say the technology has the potential to pose a security or competitive threat to their companies.
According to the survey, the top three industries most concerned about generative AI are media and entertainment, software and technology, and telecommunications, but other sectors such as retail, manufacturing, and consumer goods have also issued risk disclosures to investors.
In ADM’s annual report, the company noted that AI poses risks to data privacy and security, missed innovation opportunities, fraudulent or malicious communications, and potential competitive disadvantages. However, Arize says many companies only list risks, which may not accurately reflect their overall view of the technology.
According to Goldstein, ADM and its competitors in agriculture and food are using generative systems to accelerate and support research and development of new flavors and ingredients, which can be expensive to develop or implement.
Goldstein also noted that the smart language system could take over some of ADM's grain trading operations.
“They could replace the entire trading desk,” he said. “But again, I don’t see anything imminent that would pose a potential risk.”
ADM declined a request for comment. Although a big supporter of AI, the Coca-Cola Company The company expressed its concerns about artificial intelligence primarily in its financial report: Third-party service providers who do not follow the governance framework for their technology.
One of the biggest concerns for food and agriculture companies when it comes to AI is data privacy and security. According to a survey by Retail Economics, 46.9% of food retailers cited legal and regulatory issues as a major barrier to AI investment.
