The rapid advancement of generative AI (gen AI) has led to regulators around the world racing to understand and regulate the technology. However, the regulatory landscape for gen AI is fragmented and uncertain, making it difficult for organizations to navigate. The risks of AI and gen AI include lack of transparency, potential bias and fairness issues, privacy violations, and security concerns. Regulators are seeking to establish harmonized international regulations that promote innovation without unknown repercussions. Organizations need to act swiftly to mitigate legal, reputational, organizational, and financial risks. Key areas to focus on include transparency, governance, data and technology management, and individual rights.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Rapid advancement of gen AI requires regulation | From lack of regulation to establishing control | Harmonized international regulatory standards | Ensure safety, mitigate risks, encourage innovation |
| Gen AI adoption poses challenges for risk and compliance | Balancing use amid evolving regulatory framework | Clear and consistent regulations | Ensure compliance, manage risk |
| Gen AI technology faces regulatory scrutiny | Regulation to understand, control, and guarantee safety | Regulatory standards in place | Protect users, mitigate potential harms |
| Concerns over transparency, bias, privacy, and security | Regulatory focus on ensuring transparency and fairness | AI systems free of bias, protect privacy and data | Regulate AI to prevent harmful consequences, promote fairness |
| Fragmented and misaligned regulatory approaches | Need for harmonized international regulatory standards | Consensus on regulatory control over gen AI | Stimulate international trade and data transfers |
| Organizations may face legal, reputational, and financial risks | Swift action required to comply with regulations | Compliance and risk management strategies implemented | Avoid legal consequences, maintain trust |
| Preemptive actions for organizations | Transparency, governance, data and technology management | Solid basis for data governance and risk reduction | Ensure compliance, mitigate risks, maintain trust |