Reputation, security, compliance: Why AI risk disclosures are surging

The rise of artificial intelligence (AI) to power businesses is real — and so are the associated risks.

Two years ago, 12% of S&P 500 companies reported a material risk related to AI in their public disclosures. So far in 2025, 72% of reporting companies have disclosed AI-related risks.

The six-fold increase says as much about the general growth of AI as it does about related risks.

A new report by The Conference Board and data mining and analytics firm ESGAUGE revealed the rise, tracking Form 10-K filings by S&P 500 companies through Aug. 15.

In 2024, 58% of companies in the S&P 500 reported at least one AI-related risk.

“We’re seeing a clear theme emerging across disclosures: Companies are worried about AI’s impact on reputation, security, and compliance,” report author Andrew Jones, principal researcher at The Conference Board, said in a news release. “The task for business leaders is to integrate AI into governance with the same rigor as finance and operations, while communicating clearly to maintain stakeholder confidence.”

What are the most common risks reported?

For companies looking to mitigate AI-related risks, it’s important to know where to look:

• Reputational risks cited most often (38% of companies reported at least one reputational risk): implementation and adoption; consumer-facing AI; and privacy and data protection.
• Cybersecurity risks cited most often (20% of companies reported at least one cybersecurity risk): AI-amplified cyber risk; third-party and vendor exposure; and data breaches and unauthorized access.
• Other risks cited most often: evolving regulation and uncertainty; intellectual property; business performance and competitive risk; compliance and enforcement; hallucinations and inaccurate outputs; and ransomware and malware.

What are the most common industry sectors for AI risk?

So far in 2025, four sectors have had at least 47 companies in the S&P 500 disclose AI-related risks — financials (63 companies), industrials (48), information technology (48), and health care (47).

“Financials and health care face regulatory and reputational risks tied to sensitive data and fairness; industrials are scaling automation and robotics; IT companies sit at the center of AI development,” the report said.

A recent episode of the Journal of Accountancy podcast explored the accounting profession’s journey toward embracing AI.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.