Is Microsoft rushing too quickly to capitalize on artificial intelligence at the expense of long-term shareholder value? That was a key question at the company's shareholder meeting Thursday morning.
Krist Novoselic, the musician and author who co-founded the iconic band Nirvana, served as the spokesperson for a shareholder initiative asking the company to carefully study and report on the impact of its AI initiatives.
In a video played during the virtual meeting, Novoselic asserted that Microsoft has rushed its generative AI products to market without adequately mitigating risks, saying that the company should more to consider and address AI's risks not only for society and the world but also the long-term legal, regulatory, and reputational pitfalls for the company.
"When Microsoft released its generative-AI-powered Bing last February, numerous AI experts and investors expressed concern. Many urged Microsoft to pause and consider all the risks associated with this new technology so that the company could establish risk mitigation practices," Novoselic said. "Yet our company raced forward, releasing this nascent technology without the appropriate guardrails."
Describing himself as a long-term Microsoft shareholder, he added, "Generative AI is a game-changer, there's no question, but the rush to market seemingly prioritizes short term profits over long-term success."
L-R: Microsoft CFO Amy Hood, CEO Satya Nadella, President Brad Smith, and VP of Investor Relations Brett Iversen during the company's virtual 2023 shareholder meeting. (Screenshot via webcast)
Addressing the issue in a Q&A session at the meeting, Microsoft President Brad Smith discussed the company's focus on AI safety and responsible development. He cited Microsoft's six principles for AI development, which are implemented through employee training, software development practices, and pre-release reviews.
"We basically have developed an entire AI safety architecture that goes with each of our applications," Smith said. "At the same time, we recognize that in most markets, the public wants to know that it's relying not only on companies that are responsible, but a legal framework that, frankly, ensures that every business adheres to some common standards."
The proposal called on Microsoft to study the risks posed by misinformation and disinformation created and disseminated through artificial intelligence, and to issue a report on its plans to mitigate the risks.
Microsoft shareholders voted against the proposal, and eight other outside shareholder resolutions submitted for consideration at the meeting. The company said it will release detailed results within four days.
The proposal was led by Arjuna Capital, which previously backed a successful shareholder proposal that led Microsoft to commission and release a report on its sexual harassment and gender discrimination policies and practices.
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