AI Disclosures Move From Innovation to Risk in Public Filings

AI Disclosures Move From Innovation to Risk in Public Filings

According to a Bloomberg Law article by Diana Connor and Adrienna Huffman of The Brattle Group, AI disclosures in public company filings have expanded sharply and changed in character over the past five years. Reviewing Form 10-K filings from S&P 500 companies between 2019 and 2024, references to artificial intelligence are no longer sporadic or confined to descriptions of innovation. Instead, AI is increasingly framed as a material business risk, with direct implications for compliance, litigation, and advisory work.

The data shows a steep rise in frequency. In 2019, only 55 S&P 500 firms referenced AI at all, typically with a single mention. By 2024, 444 firms, roughly a 700% increase, disclosed AI-related terms, averaging 19 mentions per filing. These disclosures span a defined set of terms, including artificial intelligence, machine learning, generative AI, LLMs, and related technologies. As Connor and Huffman explain, even a single reference was treated as disclosure, underscoring how quickly AI entered mainstream reporting.

More important than volume is placement. From 2019 through 2022, AI discussion appeared primarily in Item 1 (Business). By 2024, most AI-related language had shifted to Item 1A (Risk Factors), signaling that companies increasingly view AI as a source of uncertainty affecting operations, financial performance, or reputation. Industry patterns evolved as well: while technology firms led early, financial services firms became the most active disclosers by 2024, followed by technology, industrials, and health care.

Regulatory scrutiny is rising in parallel. Connor and Huffman note that the SEC’s 2025 creation of an AI task force and the recent FTC actions targeting overstated or unsubstantiated AI claims reflect growing expectations that AI disclosures be accurate and well-supported. Litigation remains limited so far, but the trajectory points toward greater enforcement and private scrutiny.

AI disclosures are becoming material risk statements, not marketing language. Firms advising public companies should expect more regulator-driven inquiries, more disputes over disclosure accuracy, and growing demand for counsel who understand how AI risk, governance, and reporting intersect.