Moving on to AI, the CAQ reports: “448 S&P 500 companies, or 90%, mentioned AI-related information in their 2024 10-K. This was an increase of almost 25% from the 359 companies that did so in 2023.” Of those companies, AI was usually mentioned in Item 1A. Risk Factors or Item 1. Business, but it was also mentioned in Item 7. MD&A, Item 8. Financial Statements, and Item 1C. Cybersecurity plus — but less often — in Item 11. Executive Compensation, Item 2. Properties, and Item 3. Legal Proceedings

– Within Item 1. Business, companies discussed their use of and investments in AI-related technologies often indicating how they had incorporated it into new or existing products or services or into their own internal operations. Companies also discussed current and potential regulation in the US and the EU around AI and related technologies.

– Within Item 7. MD&A disclosures, companies often discussed their adoption and use of AI through AI-related acquisitions, investments in AI-related products or services, or AI-related enhancements to their internal operations and infrastructure. Some companies also provided information about their governance and risk management processes around AI and its rapid advancement.

– AI-related mentions in the financial statements increased by more than 50% from the prior year. While companies increased disclosures across a variety of footnotes, we observed the greatest increase in disclosures related to acquisitions, description of business, and significant accounting policies.

In addition to risk factor disclosure, an increasing number of companies mentioned AI in their Cautionary Note Regarding Forward-Looking Information.

– Meredith Ervine