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.
Without that trust, no system or institution that relies on the accurate communication and assimilation of fact—not democracy, not financial markets, not health or the environment, not small business, not policy advocacy, not human rights—will survive as we know it.
Before we reach the tipping point, which I and many of my colleague’s think may well be next year’s elections, it would behoove us to remember that other axiom about moving fast: Speed kills.
Tech firms began reporting details about government interactions a decade ago, under pressure from investors. Takedown demands from private parties - as in the Harvard case - can put companies in the awkward position of choosing sides, said Michael Connor, executive director of Open Mic, which has successfully pressed companies for details about government requests. Connor said of Google that like other tech companies, "They don't like being in the position of being content moderators, and they'd rather they didn't have to."
"We should not be turning the classroom into a combat zone or a surveillance zone," said Michael Connor, executive director of Open MIC, a nonprofit that is urging Axon's shareholders to vote to abandon the drone plan in schools and other public places at a shareholder meeting next month.
The lack of information is a problem for shareholders and users alike. Investors play a critical role in holding corporations accountable by ensuring that companies like Amazon are upholding their human rights commitments and avoiding risky behaviors. But without more transparency, investors are left in the dark.
“A big part of our concern really comes down to transparency,” Dana Floberg, Open MIC’s advocacy director, told MarketWatch on Thursday. It’s unclear exactly what data Acxiom collects, Floberg added, as well as “what kinds of measures they may or may not be taking to ensure they keep that data safe, and what they turn over to law enforcement.”
“Alphabet is one of the most influential companies on the planet that shapes people’s attitudes about all sorts of things through search, through YouTube,” said Michael Connor, executive director of Open MIC, a corporate responsibility group that also signed the letters. “The proposal … is not an extraordinary request.”
Record ESG proposals are being fueled by a more shareholder-friendly SEC regime and growing awareness of shareholder engagement tools, according to Michael Connor, the executive director of Open Mic, an organization that works with institutional investors to file social impact shareholder proposals targeting Big Tech. Companies usually try to block shareholder resolutions through legal challenges, but “right now, the folks who make those decisions at the SEC are more favorably inclined toward shareholder resolutions,” Connor told Protocol.
