AI Governance

What's your pathway to governing artificial intelligence?

AI governance isn't just red tape; it's about building AI that customers trust, regulators approve of, and competitors envy. Think beyond compliance; think market leadership. With solid governance, you're not just avoiding pitfalls—you're opening doors to partnerships, attracting top talent, and future-proofing your tech. It's a combination of risk management and opportunity creation.

Innovative companies know that ethical AI isn't a cost; it's an investment with exponential returns. In the AI race, the winners won't just be the fastest—they'll be the ones who built their AI on a foundation of trust and responsibility.

Also, I know this isn’t all that interesting to some of you, so if you want a short overview of the latest AI news, I suggest you subscribe to my other newsletter, AI Tangle. Or sign up for my beta course, The Artificially Intelligent Enterprise, and get 14 days of all my best tips and tricks to make you an AI power user.

But tackling topics like these is like eating your vegetables as a kid; even though mom’s soggy spinach isn’t everyone’s favorite, it’s probably good for you.

AI Efficiency Edge - Quick Tips for Big Gains

Create a Digital Avatar for Videos

If you are like me, you are probably intimidated by creating videos. Video is one of the most powerful tools for promotion, but creating fresh, engaging content at scale is challenging. AI platforms like HeyGen and Synthesia are changing that by enabling dynamic, scalable, and future-proof video content.

HeyGen Interface

Key Trends in AI Video Promotion

  1. Personalized Video Experiences: AI avatars allow for tailored, personalized video messages. Brands can target individual customers, boosting engagement by addressing them directly.

  2. Multi-Lingual Scaling: AI-driven translation enables rapid content scaling across languages, offering translation and cultural adaptation for global markets.

  3. Evergreen, Easily Updated Content: AI avatars make updating content simple. Minor tweaks—pricing changes or product updates—can be made without recreating the entire video, saving time and costs.

  4. Virtual Spokespersons: Virtual avatars are rising as brand ambassadors, offering consistency across marketing campaigns and customer interactions without the need for live actors.

Conclusion

HeyGen’s and Synthesia’s AI avatars go beyond video creation—they enable scalable, personalized, and easily updated content, giving brands the flexibility to stay up-to-date in a fast-evolving market.

Enterprise AI Essentials - Your Weekly Deep Dive

AI Governance

As artificial intelligence becomes more ingrained in our daily lives, managing its risks and ensuring its ethical deployment is critical for tech companies, governments, and everyone. From the tools we use at work to the algorithms shaping online experiences, AI’s rapid evolution makes it essential to have strong governance frameworks in place to ensure fairness, safety, and transparency. This growing need for AI governance is driving regulatory efforts across the globe.

Global Initiatives and Regulatory Landscape

Governments and international bodies are moving quickly to create AI standards and frameworks, recognizing its potential and risks. The EU AI Act, which became effective in 2024, is one of the most comprehensive efforts, categorizing AI systems based on their risk to society and imposing stricter regulations on higher-risk applications like healthcare and security. In the U.S., Executive Order 14110 (2023) focuses on building responsible AI usage in the public sector. China has introduced Interim Measures for Generative AI to regulate content generated by AI systems. Globally, initiatives like the OECD AI Principles and the UNESCO Ethics of AI emphasize creating a human-centered approach to AI development.

These efforts matter to everyone because they’re not just about preventing catastrophic risks like deepfakes or autonomous weaponry—they’re about ensuring that AI technologies that shape everyday life are built responsibly and are safe for consumers to trust. As AI governs more aspects of healthcare, education, and employment decisions, ensuring ethical practices becomes crucial for protecting rights and freedoms.

Critical Challenges in AI Governance

Despite these initiatives, several challenges remain. One of the most significant is balancing innovation with risk—governments and companies must ensure that regulations don’t stifle AI’s potential while protecting people from harms like biased algorithms or privacy violations. Another challenge is algorithmic transparency, which refers to the need for AI systems to be understandable and explainable to humans, something that’s notoriously difficult with today’s complex machine-learning models.

Global coordination is also an ongoing challenge, as AI is a global technology that easily crosses borders. Different countries have different standards, and aligning these governance frameworks is essential to avoid regulatory fragmentation, which could stifle innovation and lead to inconsistent protections.

Why This Matters to You

You might be wondering, how does all this affect me? AI governance touches many aspects of daily life—the facial recognition system at the airport, the chatbot helping with your online shopping, or the recommendation system guiding your Netflix choices. Inadequate governance can lead to biased systems, privacy breaches, and even misuse of AI in high-stakes areas like finance or healthcare. Understanding the governance frameworks being developed ensures that companies are held accountable and that you, as a consumer, can trust that these systems are being designed and used ethically.

Moreover, businesses that engage with AI—whether through customer data or advanced AI tools—need to understand these governance frameworks. Failing to comply with emerging regulations like the EU AI Act could lead to penalties. More importantly, companies implementing strong internal AI governance will earn consumer trust and set themselves apart from competitors.

Q2 2024 AI Adoption and Risk Report from Cyberhaven Labs

Like Shadow IT, "Shadow AI" refers to organizations' unregulated use of artificial intelligence tools. Employees are increasingly deploying AI models, such as ChatGPT, Claude, and Google's Gemini, outside official IT oversight, posing significant security, compliance, and intellectual property risks. The rapid growth of Shadow AI reflects broader trends in AI adoption, as seen in key data:

  • Exponential Growth: Corporate data input into AI tools surged 485% from March 2023 to March 2024, with 75% of global knowledge workers using generative AI tools. This surge often outpaces IT departments' ability to regulate it.

  • Security Gaps: An alarming 73.8% of ChatGPT accounts used in workplaces are personal, non-corporate accounts that lack enterprise-grade security controls. For other tools like Google's Gemini(formerly Bard), these figures are even higher, at 94.4% and 95.9%, respectively.

  • Sensitive Data at Risk: Shadow AI is exposing sensitive data, including legal documents (82.8%), source code (50.8%), and HR records (49%), to non-sanctioned tools, heightening risks of breaches and regulatory violations.

The proliferation of Shadow AI has left IT and security teams scrambling. Employees are often ahead of corporate policies, bringing their own AI tools to work. As organizations race to adopt enterprise AI solutions, their staff move on to newer, unvetted tools, fueling continuous Shadow AI growth. This underscores the urgent need for governance, education, and stricter security protocols to mitigate the risks of Shadow AI.

Emerging Best Practices

Governance is not static—it needs to evolve as fast as technology. A risk-based approach is gaining traction, where higher-risk applications like healthcare AI are more strictly regulated than low-risk ones like entertainment recommendations. Moreover, multistakeholder collaboration—bringing together industry, government, and academia—is crucial to developing comprehensive governance strategies that address all concerns.

The World Economic Forum’s AI Governance Alliance is an excellent example. It brings together over 200 organizations to create governance frameworks focusing on innovation and safety. Their Presidio AI Framework, for example, emphasizes early integration of safety measures into the AI development process, a proactive approach that encourages responsible innovation.

The Corporate AI Governance: Taking Responsibility

At the corporate level, AI governance is increasingly becoming a boardroom issue. Board oversight of AI projects is essential to ensure that risks are managed and companies comply with regulations. Furthermore, businesses are realizing that investing in AI literacy—training executives and decision-makers on the risks and opportunities of AI—pays off in the long term by enabling more competent, more informed decision-making.

Companies with robust AI governance are not only reducing their risk exposure but are also better positioned to innovate responsibly, building trust with consumers and investors alike. It’s no longer just a “nice-to-have” feature—it’s becoming a competitive advantage.

Road Ahead

Looking ahead, governance frameworks must keep pace with the rapid development of foundational AI models like large language models (the kind that power tools like ChatGPT). International cooperation will be vital in addressing cross-border challenges, and regulations must be adaptive and flexible enough to evolve alongside new technologies.

The work of think tanks like GovAI emphasizes the need for frontier AI regulation, focusing on managing the emerging risks of advanced models that could have widespread societal impacts.

The Wadhwani Center’s 2024 AI Policy Forecast also highlights that policymakers must anticipate future AI advancements' ethical and societal impacts to avoid governance gaps.

Conclusion: Why AI Governance is Everyone's Business

AI governance isn’t just a concern for technologists and regulators—it affects every business, consumer, and government. Strong governance ensures that AI technologies can be trusted to make fair, unbiased decisions while protecting privacy and security. Whether you’re a business leader navigating new regulations or a consumer wanting confidence that AI systems are fair and safe, understanding the rapidly evolving landscape of AI governance is critical for ensuring a future where technology serves humanity responsibly.

Further Reading:

AI Toolbox - Latest AI Tools and Services I am Evaluating

I typically use the tools that I am listing here. However, I am a small shop, and these are enterprise tools. Normally, I’d advise you on tools worth looking at, and I am vetting them. These are just pointers to what looks promising, but I have no first-hand knowledge.

  • Holistic AI: Holistic AI provides a comprehensive framework for managing the entire lifecycle of AI systems, emphasizing risk assessment, ethical development, and continuous monitoring. It equips organizations with tools to identify potential risks, ensure compliance with regulations, and implement best practices for fairness and transparency in AI.

  • Credo AI: Credo AI focuses on operationalizing responsible AI practices through features like AI inventory management, compliance automation, and risk assessment. Its platform streamlines governance workflows and facilitates collaboration across teams, ensuring that AI systems are developed and deployed compliantly and ethically.

Promptapalooza - AI Prompts for Increased Productivity

Artificial Intelligence Acceptable Use Policy (AUP)

I shared this prompt last month, but given the focus of this edition, it's worth revisiting. While it might not be the most exciting topic, it’s critical for organizations looking to avoid major pitfalls when implementing Generative AI in the workplace. As AI tools become more embedded in business processes, having a well-defined AI Acceptable Use Policy (AUP) is critical to preventing future issues. An AI AUP sets clear standards for responsible and ethical AI use within your organization, helping maximize the benefits while mitigating potential risks. This prompt will guide you through the process.

How To Use This Prompt

This prompt creates a simple but understandable acceptable use policy to keep your organization aligned on applying Generative AI in your workplace. It’s not a panacea but will give you a thoughtful draft to adapt to your organization.

# Objective

Guide business users in drafting a comprehensive AI Acceptable Use Policy that aligns with their organization's values, mitigates risks, and ensures compliance with relevant legal and regulatory standards.

# Instructions 
DO NOT ECHO THE PROMPT
Conduct an interview on question at a time.
Wait for an answer before moving to the next question.

Step 1: Understand the Purpose and Scope

Define the purpose of the policy.
Q: How do you see AI benefiting your organization?
Q: What risks do you want to address with this policy (e.g., data security, intellectual property, bias)?
Determine the scope of the policy.
Q: Who will be governed by this policy? (e.g., employees, contractors, consultants)
Q: Which AI tools and applications will the policy cover?

Step 2: Establish Usage Guidelines

Outline acceptable and unacceptable uses.

Q: What specific tasks do you want AI tools to assist with in your organization?
Q: Are there any tasks where the use of AI should be restricted or prohibited?
Consider pre-approved tools.

Q: Do you want to provide a list of pre-approved AI tools?
Q: How will you handle requests for new or unapproved tools?
Step 3: Address Data Security and Privacy

Incorporate data security measures.

Q: What data will users be allowed to input into AI tools?
Q: Are there any sensitive data types (e.g., PII, proprietary information) that should never be used with AI?
Ensure privacy compliance.

Q: How will the policy ensure compliance with data protection regulations (e.g., GDPR)?
Step 4: Include Oversight and Accountability

Establish human oversight requirements.

Q: What level of human review will be required for AI-generated outputs?
Q: How will errors or biases in AI-generated content be handled?
Define approval and enforcement mechanisms.

Q: Who will be responsible for approving AI tool use in the organization?
Q: What are the consequences of non-compliance with the policy?

Step 5: Author the Policy

After answering these questions, draft the AI Acceptable Use Policy by combining responses into a cohesive document. 

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Mark R. Hinkle

Your AI Sherpa,

Mark R. Hinkle
Editor-in-Chief
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