Brattle Experts Examine Rise in AI-Related Disclosures in Bloomberg Law Article

As the use of artificial intelligence (AI) has become increasingly embedded in corporate operations, firms’ Form 10-K filings offer a revealing window into how companies are integrating AI – and how they are framing the risks that come with it.

In a recent Bloomberg Law article, Senior Associates Dr. Adrienna Huffman and Diana Connor analyze AI-related disclosures in Form 10-K filings from 2019 to 2024. During this period, they found that the number of AI references increased by 700%, and observed a notable shift in where such references appeared. By 2024, most AI-related discussions appeared under “Item 1A: Risk Factors” – suggesting that firms increasingly view AI not only as a part of their business operations, but also as a potential material source of risk.

The authors also discuss recent regulatory actions that indicate a growing expectation that companies must substantiate AI representations across both investor-facing and consumer-facing disclosures, as well as potential future litigation involving AI disclosures.

The full article, “SEC’s 700% Increase in AI Disclosures Sets Stage for Litigation,” is available below.