Artificial Intelligence Effect on Valuation of Intangible Assets

Michael D. Moberly, Principal, Founder kpstrat – A Business Intangible Asset Strategy – Risk Mitigation Collaborative and Business Intangible Asset Blog A Reliable Information Source of Business Matters Intangible Since 2006

Preferably, this post may ‘kick start’ further thinking about some probable effects AI proliferation will inevitably bring, among other things to determining – assessing – valuing the origin, development process, holder – owner status, legitimacy of proprietary status, and valuation of business’s intangible assets designated as ‘mission – operation – transaction essential’ , including IP (intellectual property).

Explaining – defining AI is neither simple nor straightforward. Seldom do I come away holding a singularly complete or universally confident sense of what AI is and its array of applications. I suspect, in large part this is due to my self-designation as a business intangible asset strategist and risk mitigator, not an IT professional.

I take some solace via former U.S. Supreme Court associate justice Potter Stewart’s non-definition of obscenity: “I know it when I see it.”

I do not take solace in (as a business intangible asset strategist – risk mitigator) in the surfacing – proliferation – application of AI succumbing, ‘willy nilly’, to ‘we’ll address those issues later when problems – challenges surface on potentially large scales which we recognized will be difficult to tame, domesticate by geographic boarder, and otherwise mitigate or reclaim ex post facto.

The probable effects which AI will bring to determining – assessing the origin, development, proprietary status, and valuation of IP and ‘mission – operation – transaction essential’ business things intangible is perhaps being overlooked and/or dismissed ala ‘we’ll address that later’ following the euphoria.

Every AI contributor – practitioner which I am familiar is confident that AI is the ‘next step essential’ and will contribute to producing analytical – decisional products and outcomes which (a.) society, and (b.) each business sector, will find attractive, useful, and obliged to test and consider.

Let there be no debate, many facets – nuances of when, where, how, and why AI can be integrated – applied have yet to be revealed with many remaining in the realm of plausible speculation and research by AI proponents, practitioners, and investors.

We are obliged to recognize the countless facets of AI are already embedded in our online interactions with more advanced facets coming in the near term that will, among other things, inject more speed to product – service differentiation and selection.

Whether – how society may find it relevant at some point, to consider the possibility of partitioning particular-AI search pathways to…

  • mitigate the vulnerability, probability, and criticality that protected – safeguarded (proprietary) information and IP content are not readily revealable to the globally nefarious, is subject for debate.

Viewed through the lens of this business intangible asset strategist and risk mitigator, I suspect that well framed AI searches could serve as pathways for nefarious (economic – competitive advantage) adversaries to…

  • conclude the content of particular-patents and/or trade secrets, i.e., the various forms, contexts, and applications of intellectual capital (knowledge, knowhow), structural capital (processes, procedures), and relationship capital (associations, interactions), largely absent risk, expense, and time associated with conventional R&D.

Business leaders, management teams, boards, investors, and entrepreneurs alike, are obliged to consider how + ways astutely framed inquiries to and products of AI inquiries to open sources may mischievously and/or nefariously be used to…

  • surmise insights to – reveal conclusions of otherwise proprietarily held business processes, procedures, practices, and strategies.
  • dilutedestabilize – undermine the valuation, competitiveness, and benefits to be produced by certain proprietarily developed – held information including patents and trade secrets.
  • serve as entrees for economic – competitive advantage adversaries to glean sufficient familiarity with a business’s proprietary matters – processes, etc., to replicate same elsewhere, with less risk.
  • undermine – side-step conventional deterrents, enforcement remedies, and precedents related to infringement and/or misappropriation of issued IP.
  • encourage the nefarious to gather content for the purpose of sewing business-project-leader specific misinformation narratives to drive reputational risks. 
  • circumvent obligations and deterrents businesses seek via NDA’s (non-disclosure agreements).
  • disrupt conventional R&D strategies and premises of – requisites to capital investment.

Regardless of whether a business designates particular – information (intangible assets) as proprietary or presumes their information and safeguard practices are sufficient via NDA’s and/or IP, there remain obligations to consider + monitor various ways AI may alter either convention.

I encourage consideration to how + ways AI can advance a business, and conversely, the how + ways AI may be used to undermine a business as I have described here.

Messaging importance elevates now because 80+% of most business’s valuation, competitiveness, revenue generation capability, operating culture, and sustainability, lie in – emerge directly from various forms, contexts, and applications of business things intangible, particularly the following types – categories of intangible asset

  • intellectual capital (knowledge, knowhow)
  • structural capital (processes, procedures, protocols), and
  • relationship capital (associations, interactions, alliances), which.
    • converge as components to ‘operating culture’.

Every business is increasingly and irreversibly reliant on holding + applying (proprietarily developed) intangible assets…

  • regardless of whether it designates same as proprietary and/or presumes each is sufficiently safeguarded by NDA’s or IP enforcements.

We are obliged to consider + monitor various ways AI may alter or undermine the conventions described herein.

Respectfully, as a business intangible asset strategist, risk mitigator, and founder of ‘Business Intangible Asset Blog’, I am obliged to consider and draw attention to issues related to business things intangible, e.g., advancements, risks, safeguards, strategies, etc.) with experientially reliable research, that is absent ‘shrill, hurried, imprudent, or brash dramatics.’ Preferably this represents messages underlying each post.

This post, and each post @ 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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