4 Steps Entrepreneurs Can Take to Ensure AI Is Being Used Ethically Within Their Companies Discover practical steps for entrepreneurs to harness AI ethically, from protecting data privacy to mitigating job displacement and reducing environmental impact, ensuring that technology drives positive change without causing harm.

Artificial intelligence (AI) is a powerful technology that is expected to revolutionize the world. Companies that take full advantage of AI can completely transform their operations, gaining the benefits of better efficiency, reduced costs and enhanced innovation. This is especially true for entrepreneurs and small business owners, as they can leverage AI to perform at levels that were once only possible for major corporations.

While AI can bring tremendous positive change, many people worry that using this technology in unethical ways can cause more harm than good. As entrepreneurs and small business owners, we want to do what's right for our customers and employees. Fortunately, there are steps that entrepreneurs can take to ensure that AI is being used the right way within their companies. By understanding the ethical landscape and taking proactive steps, entrepreneurs can harness the power of AI responsibly.

Related: How to Implement Ethical AI Practices in Your Company

1. Data privacy and security

AI requires large amounts of data to perform tasks in order to provide detailed responses to user input. Oftentimes, this data contains personal or sensitive information. Data breaches can result in the unauthorized access or misuse of this information, leading to serious consequences to the business — including damage to consumer trust, financial losses and even legal implications.

The easiest form of defense is leveraging the AI's security features. Most AI platforms come equipped with safeguards such as encryption, firewalls and anonymization of data. While these tools are great, it's important to note that the vast majority (nearly 90%) of all data breaches are a result of human error. Investing in data security training for your team can mitigate the majority of data privacy and security risks.

In addition, it's important to stay up to date on any data protection laws and regulations that apply to your business, including the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA).

2. Job displacement

Small businesses are the lifeblood of the economy, providing nearly half of all private sector jobs. One of the biggest concerns is that AI will replace a large number of human jobs. While this is a real fear for employees, especially those who perform routine and repetitive tasks like data entry, the economy still needs consumers to remain healthy. With this in mind, small businesses can lead the effort of supporting the ethical and responsible deployment of AI technology by taking a human-first approach.

Instead of thinking about AI as a replacement for human workers, think about AI as a tool to enhance the efforts of team members to allow them to focus on other high-value activities. Where AI can completely replace human tasks, businesses have an ethical responsibility to focus their efforts on reskilling or upskilling team members to transition into non-impacted roles or take on new responsibilities.

Related: How to Implement Ethical AI Practices in Your Company

3. Misinformation, information bias and discrimination

While AI has many powerful use cases, it can also be used to generate misleading or harmful content, even unintentionally. Human language, culture and social behaviors can be quite complex, so AI might not pick up nuances that can significantly alter the meaning of words and phrases in certain contexts.

AI can also inadvertently make recommendations that are based on biases in the training dataset. For example, you can use AI to sift through a list of job applicants to narrow it down to a short list of high-quality candidates. This can save an entrepreneur a lot of time through the recruiting process. However, the AI could prioritize recommending a certain gender candidate simply because of historical biases in the data.

It's critical for entrepreneurs to have processes and guidelines in place to review, fact-check and validate the accuracy of information generated using AI. At the end of the day, AI is only as good as the data it was trained on. You can also mitigate risk with customers by providing transparency on which content is AI-generated through disclaimers.

4. Environmental impacts

AI requires massive amounts of energy to process data. One of the leading models of AI, ChatGPT, used about 1,300 megawatt hours of electricity just to train its third generation of the model. That's the equivalent of the electricity needed to power 130 U.S. homes for a full year. As AI becomes more mature, the amount of energy needed to power AI and the supporting data centers is expected to increase significantly.

Small businesses can support a sustainable future of AI by taking actions such as selecting AI technology that is designed to be energy efficient and using data centers that are powered by renewable energy. AI development is also expected to increase the volume of electronic waste, so implementing an e-waste policy or recycling program can help.

Related: What Will It Take to Build a Truly Ethical AI? These 3 Tips Can Help.

As AI becomes a ubiquitous part of the business world, entrepreneurs and business owners have a responsibility to find the balance between practicality and the ethical use of this technology. It's highly likely that governments and other regulatory agencies will continue to implement more stringent guidelines to protect consumers. By having ethics top of mind in your deployment of AI, business owners can reduce the risk of potential business disruptions or major changes to operational procedures.