Microsoft Corporation (MSFT) Sounds Warning to AI, Web-Connected Devices

Microsoft Corporation (NASDAQ:MSFT) is excited about the possibilities that the use of artificial technology brings to the table, but the company is also concerned about damage that could occur along the way. That’s the gist of a statement it made on AI in its annual report.

CNBC has the details on what Microsoft had to say.

The company has warned investors before about the risks involved in cloud services, where it has become a bigger force. Now, as Microsoft seeks to execute on growth opportunities associated with artificial intelligence and devices that connect to the internet, it’s flagging potential issues that could arise in those areas.

While Microsoft doesn’t acknowledge the dustup over its work with U.S. Immigration and Customs Enforcement in its report for the year that ended on June 30, it does suggest there is the potential for “brand or reputational harm” that could arise from the use of certain AI technologies:

“These deficiencies could undermine the decisions, predictions, or analysis AI applications produce, subjecting us to competitive harm, legal liability, and brand or reputational harm,” the company wrote. Microsoft pointed out worst case scenarios such as flawed algorithms or insufficient datasets could lead to a host of unintended consequences, such as ethical and privacy concerns.

“If we enable or offer AI solutions that are controversial because of their impact on human rights, privacy, employment, or other social issues, we may experience brand or reputational harm,” the company added.

Microsoft Corporation shares rose $0.22 (+0.20%) in premarket trading Monday. Year-to-date, MSFT has gained 27.45%, versus a 7.18% rise in the benchmark S&P 500 index during the same period.

MSFT currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 68 stocks in the Software – Application category.