"AI Becomes a Money Pit"... Big Tech Also Concerned

Among Fortune 500 Companies, 281 Firms

Mention 'Risk Factors' in Financial Reports

Over 5 Times Increase Compared to Previous Year

Global AI Spending Increases by 27% Annually

Expected to Exceed 420 Trillion Won by 2026

Not at Dot-com Bubble Level, Some Analysts Say

More than half of the global Fortune 500 companies selected by Fortune consider artificial intelligence (AI) as a 'potential risk factor.' Major big tech companies have also significantly increased their AI investments but are concerned about not generating substantial profits.

AI Investment Grows by 27% Annually

According to the 'Global Big Tech Companies' AI Investment Concerns' report by the National Information Society Agency (NIA) on the 25th, 281 of the Fortune Global 500 companies listed AI as a potential risk factor in their annual financial reports (FORM 10-K) this year. This is a 473% increase compared to the previous year. Among the companies that specifically mentioned generative AI, 75 out of 108 (69.4%) cited it as a 'risk factor.' Only 24 companies mentioned both risks and benefits, while just 9 listed only benefits.

Since the launch of ChatGPT in November 2022, governments and companies worldwide have invested astronomical budgets to secure AI capabilities such as models, infrastructure, and talent to gain a competitive edge. Global AI spending is expected to increase by 27% annually from 2022 to 2026, surpassing $300 billion (about 420 trillion won) by 2026.

However, despite the massive investments, there are concerns about the uncertain impact of AI technology on the financial performance of companies. According to a survey by New Street Research on the cost-saving effects of adopting generative AI, most companies reported a cost reduction rate of less than 10%.

Big Tech "Uncertain Return on AI Investments"

The situation is similar for global big tech companies leading AI investments. NIA explained, "AI content is included as a risk factor in the financial reports submitted to the Securities and Exchange Commission (SEC) by major U.S. big tech companies."

Adobe cited innovation failure due to rapid AI technology changes, massive AI R&D investment costs, responsibility factors due to AI usage expansion, and intensified AI market competition as risk factors. Amazon pointed out intellectual property infringement due to AI usage, social ethical issues, and potential revenue and profit losses as risk factors. AMD highlighted that increased investment due to competition is applied as an investment risk. Google mentioned intensified competition, social ethical issues, and unexpected results leading to corporate value damage as reasons for uncertain returns on investments. Meta also noted that despite massive investments and internal resources allocated to AI, it is difficult to guarantee profitability and investment recovery.

Experts also express concerns about big tech's AI investments. Jim Covello, a Goldman Sachs analyst, stated, "Considering the costs involved in AI, it must solve very complex and important problems," adding, "Current AI technology does not meet these expectations, and it is unlikely to do so in the future."

NIA maintains that while the AI investment craze is indeed overheated, it is not at the level of the past 'dot-com bubble.' Jinwoo Jeon, a senior researcher at NIA, emphasized, "Given that astronomical budgets and manpower have already been invested in AI and the investment scale is expected to grow further, it is time to focus on risk management."

Reporter Seungwoo Lee leeswoo@hankyung.com