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4 AI insights for executives, corporate boards

Ai in the Boardroom Cornell Keynote. Clockwise from left: Partners at Cleary Gottlieb Steen & Hamilton LLP James Hu, Angela Dunning, Chase Kaniecki, Lillian Tsu, Benet O’Reilly and D. Bruce Hoffman.

Understanding AI’s impact and ensuring its responsible implementation is essential for board members and senior executives looking to stay ahead in today’s fast-evolving corporate landscape. In a Cornell Keynote, legal professionals from Cleary Gottlieb Steen & Hamilton LLP shared what top management needs to know about navigating the opportunities and challenges AI brings to the boardroom.

  1. Navigating intellectual property (IP) challenges.

Many generative AI tools feature a public-facing platform in which users enter text prompts to generate new works, such as text, images or songs. However, because these AI models are trained on extensive datasets, often sourced from the internet, AI may create outputs based on copyrighted material.

There are currently around two dozen IP litigation cases in the United States concerning the training and output of generative AI models, including OpenAI’s ChatGPT and Google’s Imagen. “The key question is whether courts will find that the training of these models was fair use or infringing,” explained Angela Dunning, a partner who focuses on commercial litigation.

If the courts rule that AI training methods are not fair use, the development of these tools could change significantly, potentially affecting their availability and competitiveness, especially in the international market.

“The United States Copyright Office has taken the position that AI-generated outputs are not protected under U.S. copyright law because they are not authored by a human,” said Dunning. “This is now in conflict with some jurisdictions around the world, such as the EU’s AI ACT, which may impose restrictions on the use of copyrighted content for AI training and apply them to AI models globally if their output comes into Europe.”

As companies increasingly incorporate AI technology into their workplaces, board members should ensure that their companies have robust policies in place to mitigate IP risks, such as obtaining proper licenses for training data and regularly reviewing compliance with evolving laws. Proactively addressing these challenges can help protect the company’s innovations and preserve its competitive advantage in the market.

  1. Addressing SEC disclosure requirements.

Erik Gerding, director of the SEC Division of Corporate Finance, recently released a statement signaling AI as a disclosure priority for the SEC and compelling companies to be as detailed as possible in their annual reports, including identifying how the company defines AI and how the technology could benefit the company’s operational outcomes, financial condition and growth potential.

Specificity is crucial for general counsels and legal teams submitting AI disclosures to the SEC. “The SEC is focused on making sure that disclosures public companies make on AI and the opportunities it presents are tailored to that company rather than being a generic boilerplate disclosure,” noted Lillian Tsu, a partner specializing in securities and capital markets transactions.

Tsu also highlights the importance of attending to the material risks of AI technology, as the data that AI generates are predictions, not conclusions. “In other words, the disclosure should not be divorced from what is happening in reality,” added James Hu, a partner who focuses on merger and acquisition (M&A) transactions.

By adhering to these guidelines, companies not only comply with SEC requirements but also foster greater transparency and trust with stakeholders. Comprehensive and tailored AI disclosures reflect a company’s commitment to responsible innovation, offering a clear view of how AI integration aligns with the company’s strategic goals and risk management practices. 

  1. Understanding antitrust implications.

According to D. Bruce Hoffman, a partner whose practice focuses on antitrust enforcement, AI introduces four significant issues on the antitrust front: the use of AI for collusion, unilateral conduct, mergers and compliance with the Robinson-Patman Act.

The use of AI for collusion has garnered the most attention from antitrust enforcers such as the Department of Justice and the Federal Trade Commission due to concerns that AI systems could enable competitors to coordinate pricing or other market behaviors. 

“The Department of Justice has drawn an analogy stating that AI, in this context, is no different from a person. If competing companies were to send their cost data to this person who then instructed them to charge the same price, that would constitute collusion. This can potentially lead to antitrust trouble as well as exposure to civil problems,” said Hoffman.

Another issue is the role of AI in unilateral conduct, particularly in monopolization cases. AI systems could make decisions that, while rational, could be seen as anticompetitive if they harm competitors in ways that violate Section 2 of the Sherman Act. The challenge for antitrust enforcers will be determining when an AI’s autonomous actions cross the line from aggressive competition to unlawful conduct.

  1. Leveraging AI in M&A.

AI is quickly becoming a driver of M&A activities as companies look to strengthen their competitive edge. Benet J. O’Reilly, a partner specializing in mergers and acquisitions, notes that AI is a hot investment area, with firms either developing AI in-house or acquiring third-party tools to integrate into their operations.

This surge in AI-driven M&A is fueled by the need to stay ahead in a rapidly evolving technological landscape. Companies are not only seeking innovative technologies but also the talent and expertise behind them. “Talent acquisitions are crucial because they not only bring valuable technology in-house but also prevent that talent from being available to competitors,” explained O’Reilly.

However, integrating these AI-focused teams into larger, more traditional organizations can be challenging. Companies must strike a balance between maintaining the creativity and agility of these teams while aligning them with broader corporate objectives — a process requires careful planning and a willingness to adapt. 

As AI reshapes industries, M&A deals may become more prevalent, with companies increasingly turning to strategic acquisitions to build out their AI capabilities. For executives, understanding the complexities of these transactions will be crucial.

 

For more insights on approaching AI-related developments in the boardroom, experience the full Keynote “Artificial Intelligence in the Boardroom: What Board and Senior Executives Need To Know” on the eCornell website. 

This Keynote is part of  a series of discussions leading up to eCornell’s 2025 Board of Directors Forum. Register now for the opportunity to network and share best practices on cybersecurity, supply chains, data and AI, and earn a Cornell Tech Board of Directors Forum certificate from Cornell Tech.

 

Photo: Clockwise from left: Partners at Cleary Gottlieb Steen & Hamilton LLP James Hu, Angela Dunning, Chase Kaniecki, Lillian Tsu, Benet O’Reilly and D. Bruce Hoffman.

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Cornell Keynotes podcast: AI today – laws, ethics and protecting your work

Abstract multi-colored objects on blue background

Understanding the ethical and legal use of AI is important for any business. In a new episode of the Cornell Keynotes podcast from eCornell and the fourth installment of the “Generative AI” series, Cornell Tech professor Karan Girotra pairs up with professor Frank Pasquale from Cornell Law School to discuss the laws and ethics of generative AI while looking at performance guarantees as well as unintended consequences and outcomes.

The conversation highlights how organizations in finance, health, education, media and manufacturing are using these technologies in clever ways and charts a path for the next generation of use cases — ones that go beyond using assistants to enhance individual productivity.

Read more on the Chronicle.

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Professionals apply techniques for digital transformation in AI certificate program

AI has broadened how companies integrate technology and digital transformation into their operations. For Karan Girotra, the Charles H. Dyson Family Professor of Management in the Cornell SC Johnson College of Business, AI prompts questions about a new wave of automation..

The AI for Digital Transformation certificate program, authored by Girotra, combines academic theory and practical executive experience in business and technology into one seamless journey through the new opportunities and potential pitfalls that AI brings. Girotra explains how businesses can utilize these new tools for success through data collection and experimentation. The program concludes with tips for encouraging a culture of learning and leadership through AI.

Girotra discussed the power of data-driven AI enhancements and digital transformation in a recent conversation with eCornell.

How essential is learning AI for professional development right now?

“That really comes down to the question: How is the world going to change [from this breakthrough]? We’ve seen from previous generations of automation that when we automate physical work, the new efficiency forms a pattern. This time, the automation of cognitive language work allows us to benefit in certain ways, including increasing productivity of individuals and organizations. People who don’t work on implementing these ideas risk being left behind and won’t reap the benefits of automation.”

How have you worked to make digital transformation, specifically with AI, accessible for a general audience?

“The program is not basic in ambition, but it is basic in style. The technical language is minimized, and [the courses] do not use jargon. In fact, there is a whole module that I call ‘Cut through the techno babble.’ So it’s designed to be extremely accessible.”

With AI constantly evolving, does this course have longevity in its application?

“Right now, there are so many hyper-specific courses in the AI boom. You have marketing with AI or trading with AI or one of a million other subspecialties. The problem with specific versions is that they change and lose their value with [any procedural innovation]. But if you learn AI more generally – what it can do for any role – then you can invent new ways to use it without copying the current ways people are using it. In a way, there’s a trade-off. When you get more narrow, AI becomes more relevant [for current issues], but it becomes less useful as the world changes. With this course, we teach the conceptual knowledge behind AI in digital transformation to let individuals chart their own procedures in a changing environment.”

Keep pace with the rapid advancements in AI and digital technologies in the AI for Digital Transformation certificate program. Learn more and enroll.

Quotes have been edited for clarity.

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Cornell AI Strategy certificate prepares leaders to leverage new tech

In the era of artificial intelligence (AI), professionals across sectors are racing to strategize ethical and sustainable applications of the technology. Many organizations are actively pursuing AI knowledge not only to harness its potential but also to ensure responsible implementation.

Cornell’s new AI Strategy certificate program – authored by Soumitra Dutta, professor of operations, technology and information management in the Cornell SC Johnson College of Business – offers a nuanced curriculum for leaders who are ready to leverage the power of AI in various business contexts.

“Today virtually every single employee in an organization needs to understand something about AI. It doesn’t matter if it’s the senior executive in the boardroom, office worker or factory floor worker,” Dutta said.

The program, which is available through eCornell, includes six courses. Students begin with an introduction to AI then explore knowledge-based technologies, machine learning and data-based approaches to the technology. Later courses cover AI implementations across sectors, societal effects and the tech’s future prospects. Each module is designed to be applicable to the real-world concerns of any professional aiming to comprehend how AI integrates with business and society.

Upon completion of the program, students will understand how to:

  • Assess applications of AI in their organizations
  • Apply knowledge-based AI technologies to their organizations’ standard tasks
  • Address challenges by applying machine learning
  • Design strategies to implement AI systems across an organization
  • Examine the societal implications of AI in areas such as labor, privacy and ethics
  • Envision the development of strategies to preserve human dignity and agency while embracing the benefits of the technology

In light of the rapid evolution of AI, the program maintains a dynamic curriculum, emphasizing core principles and skills for comprehending the fast-changing discourse surrounding AI.

“It’s like an AI boot camp, ” said Dutta. “The program is sufficiently light on the technology side to give you enough background but sufficiently deep on the context and the strategy side. It gives you the technical background while hitting on all kinds of things happening in our world right now,” Dutta said.

AI is more than a tool; it’s a strategic necessity. Cornell’s AI Strategy certificate program prepares professionals to navigate the exciting yet complex future of the technology. Learn more and enroll today.