Legal and compliance leaders, are you ready for AI and its challenges?

Artificial intelligence is being adopted by organizations large and small and spreading rapidly through all sectors of the economy. But it also brings some new ethical and legal challenges. Read on for advice about how to handle them.

Risks & rewards

Artificial Intelligence offers enterprises a heady mixture of rewards and risks.


On the one hand, it makes software smart as never before. Thanks to breakthroughs in our ability to teach machines how to learn, AI can now automate the application of human-like pattern recognition and prediction skills to countless business problems, large and small. Machines can perform tasks such as understanding images and language that until just a few years ago were the exclusive reserve of humans. These breakthroughs have been made possible by clever new algorithms and the extraordinary increase in the power of computers.


It is no accident that these improvements arrived shortly after the Big Data revolution, thus guaranteeing that the amount of data available for training AI would grow exponentially. And AI’s flexibility means that it is being delivered at the same time from giant cloud data centers and from the rapidly expanding population of everywhere-connected devices known as the Internet of Things. In short, AI heralds a revolution whose impact on business and society will be at least as big as the PC and Internet revolutions of recent decades.

On the other hand, AI brings new challenges to enterprises that are ethical and social in nature rather than merely technological. When an organization deploys AI to build new and better business processes, it may inadvertently:


  • amplify gender or ethnic biases present in training data


  • violate data protection and privacy laws such as Europe’s GDPR or the U.S.’s HIPAA


  • create unsafe conditions for humans or cause them to lose their jobs


  • or fail in other ways to serve human needs and interests.


AI creates new forms of risk for the enterprise, both internal and external. Understanding and managing these risks will require Legal and Compliance teams to acquire new skills and knowledge.

In short, Legal and Compliance Leaders need to learn how to conduct AI due diligence—that is, evaluate both the opportunities and the risks that the inevitable spread of AI through their industries and markets will bring from an ethical, legal, and compliance perspective.

"Artificial intelligence is poised to unleash the next wave of digital disruption, and companies should prepare for it now. We already see real-life benefits for a few early adopting firms, making it more urgent than ever for others to accelerate their digital transformations. Early AI adopters that combine strong digital capability with proactive strategies have higher profit margins and expect the performance gap with other firms to widen in the future."

View the Microsoft AI video: Amplifying Human Ingenuity

This AI Insight from Microsoft is the first in a series intended to serve as a guide to AI’s Legal and Compliance issues for enterprise leaders. In this issue we begin at the beginning by addressing the questions of what AI really is and what it can do for the enterprise.