Negative Reputational Impact

Organizations may encounter AI system failures or incidents that have widespread negative impacts. This damage may manifest as a loss of trust, decreased customer loyalty, and even legal repercussions. These negative impacts may target specific communities, such as minorities, due to data biases in AI training data or may simply occur repeatedly, reflecting badly on the company. The failure of the AI system can, therefore, harm the reputation of the related company.

Depending on the size and scope of the harm caused, the organization may be subject to negative media attention. Likewise, organizations that have smaller but frequent system failures or incidents may also receive negative media attention. Negative media attention can erode trust in the organization and cause financial harm through decreased stock prices or costly lawsuits.

- AIID Incident 37: Female Applicants Down-Ranked by Amazon Recruiting Tool: Amazon's recruiting tool is regularly reported to be biased in favour of men, down-ranking female applicants entirely based on gender. The media attention led to dozens of articles citing "Amazon's sexist AI".