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SEC Rejects Apple and Disney Attempts to Bypass Shareholder Votes on AI

 |  January 8, 2024

The U.S. Securities and Exchange Commission (SEC) has denied requests from technology giant Apple Inc. and entertainment powerhouse Disney to exclude shareholder votes on their use of artificial intelligence (AI) from their upcoming annual meetings. The ruling comes after similar proposals were filed by the AFL-CIO, the largest American labor union federation, raising concerns about the ethical implications and oversight of AI deployment, reported Reuters.

In notices dated January 3, the SEC dismissed attempts by Apple and Disney to sidestep calls for reports on their AI practices, signaling a growing focus on transparency in the rapidly evolving landscape of technology integration in corporate operations.

Corporations across sectors have increasingly embraced AI for its promised efficiencies, but the SEC’s decision reflects a broader concern regarding the potential replacement of creative and professional workers and the need for fair treatment, echoing recent labor disputes in Hollywood and a lawsuit by The New York Times.

The AFL-CIO’s pension trust, which filed the shareholder proposals, seeks to shed light on Apple’s use of AI in its business operations and urges the company to disclose any ethical guidelines adopted for AI technology. Similarly, the group has asked Disney to report on its board’s role in overseeing the usage of AI.

Related: SEC Rules Apple and Disney Must Face Shareholder Votes on AI Use

The AFL-CIO’s supporting statement at Apple emphasizes the importance of AI systems being ethically trained, stating that they “should not be trained on copyrighted works or the voices, likenesses, and performances of professional performers without transparency, consent, and compensation to creators and rights holders.”

Brandon Rees, deputy director of the AFL-CIO’s office of investment, expressed optimism about the SEC’s decisions, suggesting that they could pave the way for agreements with Apple and Disney aligning their AI disclosures with industry standards, citing Microsoft as an example.

“Apple and Disney haven’t even begun to grapple with these ethical issues around AI,” Rees remarked, highlighting the potential for the SEC’s decision to push these tech giants towards a more responsible approach to AI utilization.

Source: Reuters