Take-Two, EA Warn Of “Reputational” Risks Involving AI

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Take-Two, EA Warn Of “Reputational” Risks Involving AI

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Many major game companies are using artificial intelligence for game development and other initiatives, and now EA and Take-Two have issued warnings to investors about reputational risks.

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noticed that the latest 10K filings from both companies included disclaimers about AI risks.

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, for example, mentions that the company is integrating AI “tools and technologies” into its development and business processes, noting that doing so “might present social and ethical issues.”

If EA fails to manage these issues appropriately, it could lead to “legal and reputational harm,” and for consumers to “lose confidence in our business and brands.”

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, meanwhile, states that, “The development and use of artificial intelligence into our products may present operational and reputational risks.”

EA and Take-Two are making these disclosures because publicly traded companies are required to reveal all significant risk factors to investors–including pandemics and hurricanes.

“In this case, EA, Take-Two, and others are telling investors that using Generative AI in the video games industry is becoming common and there could be risks associated with that,”

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. “Nearly all large game developers (Yes, even Nintendo) are experimenting with Generative AI at this point (Mostly at the concept stage and not in-game for the most part) and are legally required to disclose any possible risk that may impact the business.”

Some of the other risk factors that Take-Two mentioned in its filing include the internet going down, the company’s dependency on GTA, ESRB ratings negatively impacting sales, and government regulation on the internet, among numerous others. EA, meanwhile, disclosed other risks including pandemics, acts of terrorism, and natural disasters.

In any event, Take-Two, EA, and others disclosing concerns about AI is an acknowledgment that the use of generative AI has possible consequences. A recent study found that the majority of game developers globally are using AI technologies already, despite worker concerns.

Companies like EA and

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have predicted that advances to AI tools and technologies will lead to layoffs in the short term and job growth on a longer timeline. For its part, Take-Two boss Strauss Zelnick said he predicts AI tools and systems will be used to help make game development more efficient, but not necessarily less expensive; he added that machines will never replace the “creative genius” of humans.

Before this, Zelnick said artificial intelligence as a term makes no sense because machines do not learn–humans do. “Those are convenient ways to explain to human beings what looks like magic. The bottom line is that these are digital tools and we’ve used digital tools forever,” he said. “I have no doubt that what is considered AI today will help make our business more efficient and help us do better work, but it won’t reduce employment.”

Take-Two, EA,

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, and others that have embraced AI have also cut hundreds of jobs in recent times, though whether or not any of the cuts are related to AI is unknown.

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