Artificial Intelligence Produces Risk to Business’s Mission Essential Intangible Assets…Part I

Michael D. Moberly, Principal, Founder kpstrat.  November 23, 2023

This discussion about artificial intelligence produced risks to business’s mission essential (proprietary) intangible assets stem from my research, engagements, writing, and publishing over many years.

 Business’s ‘mission essential’ intangible assets emerge from innovative – collaborative inputs of intellectual capital (knowledge, knowhow), structural capital (processes, procedures), and relationship capital (associations, alliances), which frequently embed in (business, institution, and R&D) operating cultures and interact with various technologies and software.

This discussion about artificial intelligence probable effects (on mission essential – proprietary intangible assets) arises from challenges to safeguard – mitigate risk to business’s ‘mission essential’ intangible assets.

This discussion about artificial intelligence introduce two universally relevant business (operation, economic) considerations which all are obliged to consider.

  1. 70 – 80+% of valuation, competitiveness, revenue generation capability-capacity, and sustainability, etc., are directly attributable to intangible (non-physical) assets. Intangibles | BrookingsUnseen Wealth: Report of the Brookings Task Force on Intangibles on JSTORIntangible Assets: Computers and Organizational Capital | Brookings
  2. business reliance – dependence on intangible assets applies across business sectors, irrespective of size, stage of development, sales, products-services, or location. Boom of Intangible Assets Felt Across Industries and Economy – UCLA Anderson Review

This discussion about artificial intelligence oblige consideration be given to probable – universal economic and operational challenges which lie ahead to/for the ‘rightful developers – holders’ of business’s mission essential intangible (non-physical) assets, especially intellectual and structural capital.

  • Those considerations are obliged to include recognizing array of challenges that nefariously applied AI can introduce which will make it (more) necessary to defend, distinguish, verify, safeguard, and mitigate risks to ‘mission essential’ intangible assets as preludes to achieving – sustaining projected economic and competitive benefits.

This discussion about artificial intelligence admit that universal definitions of AI are neither simple nor straightforward. To that, I take solace in former U.S. Supreme Court associate justice Potter Stewart’s non-definition of obscenity: “I know it when I see it.”

This discussion about artificial intelligence project some, extraordinarily experienced business leaders, R&D administrators, boards, management teams, and investors, etc., will elect to grapple (operationally, legally) with these probable effects, later than sooner.

 To this, I urge business leadership…

  1. reflect on the (business) economic – operational realities cited above and recognize businesses ‘mission essential’ intangible assets are what businesses universally apply, rely, and depend for valuation, competitiveness, reputation, brand, and revenue generation. And, most, are internally developed and presumed to be proprietary.
  2. recognize that ‘mission essential’ intangible assets are routinely the primary underliers and foundations to the content and issuance of IP, i.e., a patent, trademark, copyright, or trade secrecy.

This discussion about AI effects anticipates ‘mission essential’ intangible assets in play across sectors and arrays of R&D initiatives, projects, undertakings, and transactions. can be subject to and/or targeted for exposure. Should this occur, it will render those assets more susceptible – vulnerable to being adversely undermined, misappropriated, infringed and reputational – misinformation risks, via nefariously applied AI, applied at will (sic).

This discussion about probable effect of AI, is delivered with prudent intentions w/o ‘shouting the house is on fire’. Instead, this discussion introduces considerations, i.e., the vulnerability to, and probability of particular risks materializing via nefariously applied AI and the criticality (adverse effects of same. How Does Artificial Intelligence Affect Intellectual Property Protection? – Silicon UK Expert Advice

This discussion about AI effects, recognize incongruities-challenges associated with executing some of the current (legislative) proposals proclaiming to tame, curtail, and/or ‘put fences around’ AI’s aggressive expansion. U.S. Artificial Intelligence Policy: Legislative and Regulatory Developments | Covington & Burling LLP

This discussion about AI effects, encourage the majority-of businesses which are intangible asset intensive, dependent, and reliant to recognize that

  • Reclaiming – recouping ownership, economic, and reputational rights to business’s proprietarily developed-held intangible assets after risks have materialized, i.e., plagiarized, poached, undermined, misappropriated, infringed, and/or ‘misinformation-ed’, is unlikely to be simple, quick, or whole.
  • Ala economic espionage, a relatively modest portion of the economic, competitive advantage, and/or reputational losses may be recouped if lengthy investigation and legal action, and outcomes align. Probability of favorable outcomes decline ‘overtime’ if the alleged culprits reside and/or the act executes outside the U.S.

This discussion about AI effects obliges all to consider similar or worse projections of (economic, operational, reputational) recovery if-when nefariously executed AI is the originator, and AI is unlikely to be receptive (sic) to conventional deterrents, mitigation, preventatives, or being ‘slowed down’ vis-à-vis investigations and/or convictions (sic).

 This discussion about AI effects also obliges all to recognize that AI is a ubiquitous consumer service and/or product which comes with appealing – tempting economic (competitive advantage, revenue generation) logics (to/for business leaders, entrepreneurs, R&D administrators, management teams, boards, and investors across sectors).

Taking advantage of AI generated content – product (applications, understandings, insights, etc.) conceivably at less cost, minus long wait times, when needed, while minimizing-reducing cost of time-consuming R&D and human (labor) inputs, which come with more projectable – definitive times for application and/or rollout, should not be dismissed or disregarded.

For professionals – practitioners charged with safeguarding – mitigating risk to proprietarily developed – held intangible assets, the various advances – advantages delivered via AI must be incorporated, e.g.,

  1. reflect slight alterations to conventional risk – threat materialization relative to the growing percentages of businesses across sectors which are intangible asset intensive, dependent, and reliant,
  2. include if, when, where, how, and why risks (perhaps induced – triggered by AI) may materialize, and whose perspective of vulnerability, probability, and criticality will guide.
  3. probable menacing challenges to affect determining – assessing the origin, development, proprietary status, and valuation of proprietary (mission essential) intangible assets and/or IP warrants consideration and action, even in-the-midst of present-day AI euphoria.

Part II of Artificial Intelligence Effects on Business’s Proprietary Intangible Assets is forthcoming.

As a business intangible asset strategist, risk mitigator, and founder of ‘Business Intangible Asset Blog’ drawing attention to particular-advancements, safeguard methodologies, strategies for risk-threat mitigation, is deemed ‘mission essential’ especially when same is devoid of ‘shrill, brash, ill-considered, mis-informed, misunderstood, and brash dramatics.

kpstrat is a Business Intangible Asset Strategy – Risk Mitigation Collaborative and Business Intangible Asset Blog is a reliable resource about business things intangible.

This post, and each post published @ Business Intangible Asset Blog, is developed, researched, written, and published entirely @ the experienced hand of Michael D. Moberly.

The ‘Business Intangible Asset Blog’ originated in 2006 and now includes 1100+ long form (topic specific) posts intended to respectfully provide readers, ala business leaders, management teams, boards, and investors (nationally – internationally) with reliable insights and perspectives about the intangible asset-side of business development, economics, valuation, competitiveness, operability, resilience, and sustainability.

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