Looking beyond generative AI's gloss: Four questions for every business leader to ask and answer

As billions of dollars flow into generative AI tools over the next few years, businesses have become captivated by the art of the possible. Few leaders are thinking carefully about the risks, ethics and frameworks needed to navigate our way with safety – but they can start today with four simple questions.

Generative AI looks shiny – and it is shiny. Just one recent report, published by Microsoft and the Tech Council of Australia in July, estimates generative AI could contribute as much as AU$115 billion a year to Australia’s economy by 2030.

Up to $80 billion a year, according to the report, could come from the automation and augmentation of routine tasks. Around 44% of the average Australian worker’s task hours could be freed up to focus on higher value-adding tasks and increasing the quality of their output.

Generative AI is certainly a hot topic. Just months after the release of ChatGPT in November 2022, Bloomberg was reporting a 77% spike in investor interest in generative AI. But ChatGPT, Bard and Bing are just some of the countless generative AI tools that businesses are using to craft copy and analyse images, summarise large slabs of text and visualise data, sort customer queries from spam, make personalised product recommendations and more.

As companies play in the sandpit with generative AI, how many are also building robust AI frameworks to guide their investments? I recently moderated a panel discussion at Australia’s inaugural Generative AI Summit, and the few hands raised were instructive.

EY has invested significant sums towards AI and generative AI over many years. We’ve established alliance partnerships with technology companies and have helped many clients develop AI strategies and implement game-changing projects. In doing so, we’ve learnt some powerful lessons.

Generative AI “hallucinations” have captured a lot of headlines this year, starting with a false claim about the James Webb Space Telescope. Chatbots can create false information – and that has the potential to spread fake news.

But the biggest problem for business is not separating fact from fiction. The biggest problem is irresponsible usage of generative AI – much of it accidental. Information leakage is one example of this. We have already seen cases of enthusiastic and experimental employees plugging confidential customer information into public generative AI platforms. How does the generative AI platform use this data? This is not a question that many employees are asking.

The most recent EY Future Consumer Index, which surveyed consumer sentiment in 27 countries, found just 9% of Australians had a good understanding of AI, including how and when it is used. For example, three in five Australians were unaware that social media apps use AI.

These consumers are the same people working in our companies – and they aren’t yet trained to understand the implications of generative AI in their workplace. Consumers’ biggest concern about AI – noted by 57% of respondents to the EY Future Consumer Index – is potential data breaches. This should be a clarion call to corporations.

Speaking in another session at the Summit, my colleague and EY Partner Ean Evans urged the audience to remember that generative AI is “just another tool for your business transformation that needs to be used appropriately while reimagining the business of the future”.

So, what can business leaders do today as they reimagine tomorrow??

EY has built a framework to help companies evaluate AI risk and build controls across five trust attributes, four risk categories and three governance domains. This framework can be a useful reference point.

EY's quest for a better working world always starts with better questions. By asking better questions we can interrogate the issues that are most important to our clients, and tailor how we respond to their unique circumstances. With that in mind, here are four questions for every business leader to ask:

1.??????What questions must my company consider when assessing the potential of AI tools?

2.??????What are the specific risks to my business and how can they be mitigated?

3.??????Do we have the right rules and frameworks in place to manage these risks?

4.??????How does our business ensure employees are trained to use AI not only efficiently, but ethically?

We think these are questions that every business must ask and answer.

Generative AI will catalyse foundational shifts in business models. This may be through monetising data or new product innovation, by reinterpreting market segmentation or reinventing delivery, through supply chain optimisation or customer experience. But we can’t reap the rewards without first understanding the risks.