AI Risks for Small Business: 7 Critical Trade-Offs

Sam Altman’s rejection of a $97.4 billion offer for Open AI by a consortium of investors led by Elon Musk is the latest twist in a long-running dispute. Musk and Altman co-founded the startup as a nonprofit in 2015, but the relationship soured since Musk left the company in 2018. Altman is expected to restructure the company into a for-profit entity. However, his rejection of the offer does not neces­sarily mean that the proposed takeover is dead. OpenAI’s board will have a say and may favor a sale, especially if supply is increased.

Impact on SMEs

Not only is this an example of what can go wrong when relation­ships between SME founders and partners fail, but a Musk takeover could also have a signif­icant impact on the devel­opment of artificial intel­li­gence. The technol­ogy’s benefits, partic­u­larly for SMEs, could also be affected by the UK govern­ment’s recently announced Oppor­tu­nities Action Plan, which aims to make the UK a “super­power”. Local and regional author­ities across the UK are being encouraged to transform their commu­nities into dedicated centers for infra­structure devel­opment.

Artificial Intel­li­gence is not new

Under­standing the Role of AI in Small Business

AI Risks for Small Business Explained

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Useful standards and guidance are available from the OECD BEPS programme, the Financial Action Task Force and the European Commission taxation portal.

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Artificial Intel­li­gence isn’t really that new. The first successful checkers and chess programs were written to run on a Ferranti Mark 1 machine at the University of Manchester in 1951. Early versions were complex systems that could only be used by large companies that invested a lot of money. What is new, however, is the fact that recent techno­logical advances mean that this technology is now a powerful tool for small businesses of all sizes.

Tools for small businesses

There are several solutions available for small and medium-sized businesses that could provide benefits such as improved produc­tivity, reduced costs, and higher customer satis­faction. Some of the most common technologies that smaller businesses come across include chatbots to respond to customer issues, data analysis tools, and content creation services. However, adopting these technologies for smaller businesses is not without its challenges. Data can sometimes be of poor quality or out of date. Imple­menting systems can be time-consuming, especially if the company does not have the necessary in-house capabil­ities and needs to outsource. There may also be legal concerns regarding the collection of sensitive data by algorithms.

Automate routine tasks

Entre­pre­neurs can spend hours dealing with time-consuming everyday tasks, while tools can handle many routine tasks, allowing entre­pre­neurs to focus on more strategic thinking. Tools like otter and Wingman can transcribe conver­sa­tions, although it is currently advisable to have all transcrip­tions checked by a human as accuracy and quality cannot be guaranteed. Diary management appli­ca­tions such as: Movement and Akiflow use technology to create optimal daily schedules and be much more reliable in this type of task.

Many software solutions can create invoices, analyze financial data, and track employee expenses. The creation of content for marketing commu­ni­cation, research and writing SEO texts can also be simplified by using tools Grammat­i­callyalthough the quality of the final product can vary greatly. Tools such as ChatGPT You can generate content or suggest topics by analyzing your target audience’s interests.

There are also a series of Microsoft products called Copilot that come free with a standard business license of Microsoft Office. One is an AI platform that is “walled off” from every­thing else (there is a full version that has access to your Word and Outlook accounts). This iteration of Copilot could be a good place to exper­iment with AI in a relatively safe environment.

Customer service chatbots

One of the most common uses of technology in small businesses is customer service chatbots to handle routine questions. These tools help reduce pressure on human customer service agents and can act as a triage service. Many of these tools can also predict behavior so that a more person­alized service can be offered. They can also quickly analyze data so that companies can use it to create, customize or customize marketing campaigns and other strategic business activ­ities. Technology can also help make HR processes more efficient by writing job adver­tise­ments and descrip­tions, targeting suitable candi­dates through social media platforms such as LinkedIn, and automating the onboarding process for new employees.

Risks of AI use

The use of technology has obvious benefits for SMEs, but there are also certain risks associated with its imple­men­tation. If these tools are part of the software you purchase or download, those creators are respon­sible for their use in their product. If you use free tools or software in your company, it is important to review all products to ensure they are used ethically, safely, and compli­antly.

Such tools source content from the internet. Therefore, it is also important to ensure that your production does not infringe any patents, copyrights or trade­marks. Likewise, security risks still exist in the form of phishing campaigns that may have been written using automation. Therefore, do not enter sensitive data or propri­etary infor­mation into the system that could be used for content.

Customer trust is also important and disclosing the use of AI is becoming an expected best practice. Tools that detect generated content can mark it as spam, which could negate future outreach efforts and increase customer resis­tance to your commu­ni­ca­tions. Motion Paradox’s team of start-up business and legal advisors based in London and Los Angeles can work with you to review and evaluate messaging and outreach campaigns to ensure they are legally compliant and accurately reflect your company’s culture and principles.

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