The US military alone has more than 800 active AI-related projects and has requested almost US$2 billion in funding for AI in the 2024 budget.
“Any companies providing technologies to militaries that could be violating human rights or the laws of war run the risk of criminal indictments, sanctions, civil suits and considerable reputational damage,” said Audrey Mocle, Deputy Director of non-profit Open MIC.“The risks for investors in these tech firms increase as they become more enmeshed with the [weapons] sector.”
Investors, particularly those with stakes in the big tech hyperscalers and limited partnerships in venture funds exposed to generative AI, should be critical of overselling the benefits of this new technology — financial or otherwise. Efforts should be made to encourage the deployment of this technology toward more productive ends. Any actual benefits should be weighed against the very real costs for which tech companies should be held accountable.
US-based tech firms’ close ties with the Trump administration are unlikely to discourage continued pushback and engagement from ESG-focused investors in the longer term.
“Aligning with political leaders may seem expedient in the short-term, but tech company heads may regret going all in if these leaders’ popularity declines or their policies are seen to be capricious and harmful to people and markets,” - Jessica Dheere, Open MIC Advocacy Director
“While Trump will undoubtedly have an impact short-term, we think ESG principles will ultimately prevail because they represent a smart way of doing business.” - Michael Connor, Open MIC Executive Director
With AI-related risks being inherently global in nature, the hope and anticipation is that there will be a suitably robust regulatory environment wherever the technology is deployed, Michael Connor, Executive Director at Open MIC, tells ESG Investor.
“Many companies have global activities, so we need to ensure that if they are applying a higher standard in Europe due to EU regulations, this should be the case wherever they operate to foster greater corporate accountability in the deployment and use of digital technologies,” he says.
According to an analysis of U.S. Securities and Exchange Commission data by the activist shareholder organization Open MIC, 68% of outside investors voted during the May 30 meeting for Facebook to separate the board chairman role from the C.E.O., up from 51% who voted on a similar proposal last year. An even more overwhelming majority, 83%, voted to implement a “one share, one vote” system at Facebook, replacing the dual-class structure that's now in place.
It will be several days before the resolutions’ supporters know exactly by how much they lost. Even if the margin is large, these issues aren’t going away anytime soon. “These proposals, to be effective and to attract the attention of a company, they don’t need to be a 50 percent vote,” says Michael Connor, the executive director of Open MIC, a nonprofit that works with tech investors and helped write the facial recognition proposals. “It takes a long time to educate people about these issues and to bring major shareholders on.”
“We’re not Luddites, we’re not anti-technology,” said Michael Connor, the executive director of Open MIC, a nonprofit group that works with activist investors in the tech sector and helped draft the facial surveillance proposals with Amazon shareholders. “But we do think all these technologies have to be handled and introduced in a responsible way.”
Michael Connor, executive director at campaign group Open Mic, said it was dangerous for companies to be “paving the way” for the roll-out of facial recognition products without having thought it through. “AI experts say we’re not there yet,” he said, pointing to a study by MIT Media Lab researcher Joy Buolamwini, which found that two leading facial recognition programmes misidentified black women up to 35 per cent of the time.
On Friday, lawyers for Amazon filed a last-ditch request asking the SEC to reconsider its judgement, but on Tuesday the Division denied that request. “As a result, there will be two shareholder proposals regarding facial recognition on the ballot at Amazon this year,” said Michael Connor of Open Mic, a nonprofit focused on corporate accountability that helped organize the effort.
