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Driving Change

As he talked about artificial intelligence (AI) and how it’s being used by the auto sales industry, Rob Pion chose to first discuss consumers — and the modern shopping
experience — in general.

“It’s a 24/7 world — we’re an immediate society; people don’t want to wait for the next business day for anything,” noted Pion, president of Bob Pion Buick GMC in Chicopee, the dealership started by his grandfather. “It’s 2 in the morning, you wake up and say, ‘shoot, I forgot to order ‘X,’ you jump on Amazon, order it, and it’s there before you wake up in the morning or the next day.

Rob Pion says AI has helped auto dealers better serve customers in a 24/7 world.

“People expect that out of everything,” he went on, adding that this includes cars, trucks, a part, or a service appointment. In short, customers are looking for information and insight — and in many, if not most, cases, they don’t want to wait until the next day for the answers.

And that’s one way dealers are using AI, Pion said — to chat with customers, answer questions, and collect some leads at all hours of the day.

“At least we have someone, or something, responding 24/7 to customer inquiries and concerns,” he explained, choosing those words carefully and then noting that AI is a way for dealers to meet consumers where they are, on their schedule.

But providing answers to questions on lease rates at midnight is just one of the ways auto dealers are putting AI technology to work. Others include everything from finding answers for technicians in the service bay to slicing through the remarks in customer reviews to find common threads, to finding holes in service schedules — and filling them.

“We always read through reviews, but you don’t always catch the themes as they come in,” said Alex Balise, director of Corporate Strategy for Balise Auto Group. “I’ve been using AI to read our reviews for the past three months and tell us key themes so we know what customers appreciate and where we can improve. A one-off review doesn’t necessarily tell you what the real experience is, but, looking at the themes, you can see that wait times have become an issue at this store or they really like the muffins at Balise Subaru in Hadley, so we should keep those. AI can tell us that.”

And it can do many other things, such as providing help with pricing to analyzing inventory to helping make sure the dealerships are carrying the right mixes of vehicles, said Carla Cosenzi, president of TommyCar Auto Group, noting, as others did, that the technology is certainly not intended to replace the human interaction that has marked this industry from the very beginning, or replace people.

“We want to use AI to make us a better resource for the customer and make sure we don’t lose that human interaction that we pride ourselves on here.”

“We use AI a lot,” she explained. “We’re a very customer-centric and community-focused dealer group, so we want to use AI to make us a better resource for the customer and make sure we don’t lose that human interaction that we pride ourselves on here.”

For this issue and its focus on auto sales, we look at the various ways AI is being used today, and how it might be used in the years to come.

Speed Thrills

Like most other industries, the auto sales and service business is really only beginning to tap into AI and its vast potential.

Indeed, those we spoke with said that, while many different uses have been found for the technology, there are many others still in the developmental stages, with testing ongoing. But already, individual dealers and larger groups have been successful in developing strategies for using AI in everything from sales to marketing to service and using the technology for what it was designed to do — creating efficiencies while allowing employees to do what they do better and make more efficient use of their time.

And in many cases, time is what is being saved — for those working at the dealership, and for customers as well.

“AI gives customers really quick, personalized, and smarter responses with transparent pricing, and it gives them a quicker transaction time,” said Cosenzi, citing the example of a customer looking for information online. 

“If a customer wanted a price on leasing a Nissan Rogue and sent in a quote to our internet department … before, our internet department would have to go to the sales managers and get information from them to properly quote the vehicle if they wanted a lease or different financing options,” she explained.

“But we have new software and AI that enable us to get right back to a customer in under five minutes and give them a completely transparent quote that gives them all the options they need, whether that’s purchasing, financing, options for different money down, for different financing institutions — all in less than five or 10 minutes. Before AI, it might have been 20 or 30 minutes.”

Balise agreed, and offered another example, this one in the service bay.

“A lot of the manufacturers have added AI support,” she explained. “So when a technician is working on something and has a question, their AI guide can help finish the repair sooner than if they had to call a support line and wait for an answer. That’s been a big help with making a repair time faster; AI can read their whole manual, which could be hundreds of pages, and spit back the specific instruction needed for that repair.”

Using AI to sift through customer reviews also saves time, Balise said, noting that employees would spend hours reading through the responses looking for common themes and issues to address. “AI can do it five minutes and give us action items that can make a real difference in the customer experience.”

Beyond saving time, AI is also helping dealerships be more efficient with everything from how they market their products and services to how they shape their inventories, Cosenzi noted, adding that new uses for the technology are continually being explored.

“It’s a 24/7 world — we’re an immediate society; people don’t want to wait for the next business day for anything.”

“We use it to match the right vehicle to the customer for their situation to help meet their goals and accomplish what they’re looking for, which saves them time,” she said. “We use it to price our vehicles in the market to make sure we’re the most aggressive and our customers are getting transparent, upfront, live-market pricing; we’re using it to help customers schedule appointments with us smarter and faster; and we use it to analyze our inventory so we’re carrying the right mix of what our customers are searching for.”

People Power

The overriding strategy is to put AI to work in ways that will enable employees to save time and put their energies in other directions, not put them out of work, said those we spoke with.

“We’re looking for where AI can make our teams more efficient so they can spend their time doing the human things we need them to do — connecting with customers,” Balise said. “AI should be an extra tool for our team. It’s not replacing people; it’s making them more effective in their jobs.”

Pion agreed. “We’re a ways from AI replacing people, especially in our business,” he said. “It’s a personal experience when you’re spending this kind of money, and people want to deal with people. I see AI as a way to communicate with people overnight, when I can’t expect someone to be doing that on my behalf. But there’s no replacing human interaction in a business such as ours.”

While AI is making its mark in the auto sales industry, those in the business say that, in many ways, dealers are only scratching the surface when it comes to this technology, what it can tell them, and how it can make their operations more efficient.

Right down to the muffins at the Subaru dealership. 

Special Coverage Technology

The Future Is Now

John Fazzio of Pilot Precision Products leads a breakout session.

John Fazzio of Pilot Precision Products leads a breakout session.

 

Ben Grande spends $20 a month on a ChatGPT subscription. It’s a small expense with an occasionally very high return on investment.

“We’re making a huge capital purchase right now, and I wanted to knock the price down, so I hopped on ChatGPT,” said Grande, general manager of Meridian Industrial Group, a precision machine shop in Holyoke. “ChatGPT knows me and my company very well. I said, ‘here’s what we’re buying, here’s what we want to buy it for — but I want the price lower. Can you write me an email?’ It wrote the email, and five minutes later, I got $25,000 off the price. That’s well worth the $20.”

In his day job and also as president of the Western Massachusetts Chapter of the National Tooling and Machining Assoc., Grande has become well-versed in the potential of artificial intelligence in the manufacturing field, and he joined about a dozen other industry experts in sharing those insights on March 26 at the first installment of Strategy+Ai, a quarterly series BusinessWest has launched that dives into how AI is used — and could potentially be used — in a host of sectors, and by businesses of all kinds.

“You’re here in this room because you’ve heard about this thing called AI, and you’re somewhere on the journey from AI-curious to implementing it in your organization and wondering how it’s going to change everything — because it is changing everything.”

“You’re here in this room because you’ve heard about this thing called AI, and you’re somewhere on the journey from AI-curious to implementing it in your organization and wondering how it’s going to change everything — because it is changing everything,” said Paul Silva, CEO of Innovate413, one of BusinessWest’s partners in the AI series.

SEE: Scenes from the event below

“There are things possible now that five years ago would have been considered impossible,” he went on. “And if we embrace those opportunities, it’s going to have a profound impact on our businesses. If we don’t, there’s a fair bit of peril. So that’s why you all chose to come here today … to help you figure out what the next step in that journey is.”

Laura Teicher, president of FORGE — a nonprofit with a mission to help innovators navigate the journey from prototype to commercialization, and another partner with BusinessWest in the new AI series — noted that 57% of manufacturers are already using AI in some way.

Fletcher Conlon (left), 3D modeler and concept artist, and Greg Dumas, senior project manager, of RP Masiello, one of the event sponsors.

Fletcher Conlon (left), 3D modeler and concept artist, and Greg Dumas, senior project manager, of RP Masiello, one of the event sponsors.

“Now, is that always the most efficient way or the safest way? I think it depends on the manufacturer,” she said. “We want this event to help make AI feel more accessible and less scary because it’s happening; we’re all working on it. So many people in my network have been doing cool stuff with AI in their factories, but have been shy about talking about it because we’re all in the experimental phase. So today, we’re hoping to get some actionable insights. We want this to be a value add for all the manufacturers and ecosystem builders in the room.”

The inaugural event in the series was sponsored by RP Masiello and the Western New England University (WNE) FinTech program.

Greg Dumas, senior project manager at RP Masiello, told BusinessWest that the Boylston-based commercial building and construction management firm, which has an office in Amherst, has been increasingly busy with projects in Western Mass..

“We’re interested in tying in how AI could potentially help us in our construction fields and how we could better serve the clients and the end users, and how to tie it all together,” he said.

“The reason why we have our panelists here is they’ve taken that first step on that journey. These are people who’ve had the courage to reach out and begin to figure out how they can use it, and they’re starting to use it to their benefit.”

Meanwhile, Charles Mutigwe, associate professor of Business Analytics at WNE and director of its FinTech program, said the program wants to work with manufacturers, and this event was a good way reach out to more of them.

“We’re looking at it as an opportunity to build a bridge between our AI teams, with our supercomputer on campus, and companies that may need solutions or partners to do some of this.”

 

Sharing Success Stories

The event featured four breakout sessions, including one with John Fazzio, president and chief operating officer of Pilot Precision Products, a manufacturing company in South Deerfield.

“We have been using AI for the last few years, but most importantly, in the last year, we’ve actually implemented our first two AI agents,” he said, referring to autonomous software entities that companies use to solve problems and streamline processes.

Charles Mutigwe of Western New England University’s FinTech program, another sponsor, says the event is a way to build a bridge between the college and local companies.

Charles Mutigwe of Western New England University’s FinTech program, another sponsor, says the event is a way to build a bridge between the college and local companies.

The first such agent at Pilot is a customer service agent. The business gets anywhere from 60 to 80 phone calls a day, and the agent is currently handling 30 to 40 of those, thus saving almost 50% of typical phone call time daily.

“I just feel like the last thing I want a customer to do is call and get stuck in the loop of some automated phone system where they can’t really get to a person. So I didn’t really want to make the agent talk on the phone. Instead, I just decided to put the agent right on my website,” Fazzio explained.

“A couple of great things came from that. One, I get to drive traffic to the website, and I get to monitor all the traffic that comes in and where they go and what they look at. But on the flip side, people can go in, they can put in their customer information, part number, quantity, what they’re looking for. It will literally go into our system, look up that customer, pull their customer-specific pricing … find out how many we have in stock, and can give them an answer right over the website in about two minutes. It’s just like a chat box that sits and floats on the website.”

“Manufacturing was actually one of our top two industries for many, many years. And I believe that we can become that once again, moving forward with all of you.”

Vinny LaRocca, chief technical officer at Tetra, an AI software innovation firm, said he thinks about AI as a modular library of capabilities that can be deployed at various companies.

“A good example is in machine maintenance. You may have a spreadsheet that you’re doing work orders on. In that case, you probably need a ticketing system. And we can deliver an AI agent to help you with root cause analysis and corrective action of all of your maintenance systems,” he explained. “So as soon as something happens, you get step-by-step instructions on what to actually do to fix the problem.”

Scott Longley, a manufacturing expert in residence for FORGE, told the attendees that they likely came because they have an idea about what AI is and how they can use it — and want to know what the next steps are.

“The reason why we have our panelists here is they’ve taken that first step on that journey. These are people who’ve had the courage to reach out and begin to figure out how they can use it, and they’re starting to use it to their benefit,” he said. “We always talk about how it’s a great wave coming of AI, but these are actually people who are starting to build that foundation. And I think we all need to realize that that foundation starts locally.

Gavin Giguere of REIGN Manufacturing speaks with attendees at a breakout session.

Gavin Giguere of REIGN Manufacturing speaks with attendees at a breakout session.

“We have all the tools in this community we need to build a great foundation for future growth,” Longley added. “These are people who have been courageous enough to reach into that toolbox and figure out how to use those tools. Our goal today is to get you to hang out with them and find out if what they’re doing can actually help you.”

 

Continuing the Conversation

As noted, BusinessWest’s new Strategy+Ai series will be presented quarterly, each event focusing on a different sector, Associate Publisher Kate Campiti said.

“For the first, we wanted to bring the manufacturing community together to learn about some of these AI strategies. We’re going to be focusing in May on professional and financial services, in August on construction and building trades, and in November on nonprofits.”

The assembled guests on March 26 certainly see value in continuing the conversation about a technology that isn’t going away — that, in fact, poses risks for businesses who choose to ignore its potential.

Aaron Vega, president of the Western Massachusetts Economic Development Council, noted that he is the only representative from Western Mass. serving on Gov. Maura Healey’s Massachusetts Competitiveness Council — and he constantly touts this region as a potential hub for fledgling businesses to grow and innovate in evolving technologies, including AI.

“It’s not easy doing business in general. It’s not easy doing business in Massachusetts. There are some headwinds,” he said. “There are a lot of advantages to doing business in Massachusetts, but we know that you’re being courted by other states, and we appreciate that you’re staying here. And we’re trying to build a better ecosystem and support system for you.”

State Rep. Orlando Ramos added that “it’s always great to be in a room with people who don’t just talk about the future, but people who are actively building for the future.

“Manufacturing was actually one of our top two industries for many, many years. And I believe that we can become that once again, moving forward with all of you. So I encourage you all to continue doing what you’re doing. This is the perfect place for this to be taking place,” he went on. “Continue to innovate, continue to believe in yourselves, continue to build, and continue to prepare for the future.”

 

The inaugural edition of BusinessWest’s new Strategy+Ai series featured presentations, breakout sessions, and plenty of networking (Staff Photos): 

 

 

Opinion

Editorial

 

Last week, a new international study, called “Firm Data on AI,” reported that artificial intelligence (AI) adoption is now widespread across the U.S. and other countries with advanced economies — but measurable impact remains limited, or at least elusive.

The study, which surveyed nearly 6,000 CFOs, CEOs, and senior executives across the U.S., U.K., Germany, and Australia found that about 70% of firms are actively using some form of AI; in the U.S., that figure is 78%.

However, more than 80% of the surveyed firms say AI has had no impact on employment or productivity over the past three years.

Something has to give — and it’s probably not going to be the advance of AI, which seems here to stay.

“The total impact of AI … I don’t think anyone knows what it is,” said Scott Longley, a manufacturing expert in residence for FORGE, one of the companies partnering with BusinessWest on a new workshop series centered on putting AI to the most productive uses (see story on page 4).

Our new StratAI Series aims to demystify the potential of AI in several different sectors, starting with manufacturing on Thursday, March 26 at the STCC Technology Park. Future workshops will address the impact of AI in professional services such as law, accounting, and financial services; nonprofits; the service sector; and others.

Considering the statistics above — the idea that almost everyone is using AI, but few companies truly grasp it — this series is especially timely, and we are excited to partner with a number of smart, forward-thinking business leaders to bring it to you.

“Manufacturers, especially Western Mass. manufacturers, have had their hands so full dealing with the regular chaos of the economy that taking time for new technology has never been at the top of the priority stack, and understandably so,” said Paul Silva of Innovate413, one of the partners on StratAI. “It needs to be a conservative industry. You spend a lot of money for capital assets, so you can’t afford to really screw up; they have to be very careful.”

But that’s also true of other sectors, and so are the feelings of general uncertainty around how best to incorporate AI — and why. We are confident, and excited, that this StratAI Series is an important step in the right direction.

Cybersecurity Special Coverage

Evolving Threats

Sean O’Brien says cybersecurity used to be seen as a niche issue

Sean O’Brien says cybersecurity used to be seen as a niche issue in many business sectors, but has become a central concern.

As high-tech businesses grapple with the implications of artificial intelligence (AI) — and workers worry what that might mean for their job security — those who work in cybersecurity may have reason for optimism, Sean O’Brien said.

“Even though we’ve seen a shift, certainly, in IT careers around AI — folks getting laid off and so on — cybersecurity is still humming along. It’s one of the hot industries, essentially,” O’Brien, director of Cybersecurity at Bay Path University, recently told BusinessWest.

A few days earlier, O’Brien had led Bay Path’s 13th annual Cybersecurity Summit, where he and other experts discussed how artificial intelligence is reshaping cybersecurity, education, and workforce development, and what all that means for career paths in this quickly evolving field.

Some young people might be scared off by what they perceive as the highly technical nature of cybersecurity, but he emphasized that the field, and the work being done within it, is strikingly diverse.

“One of the reasons I keep emphasizing the non-technical nature of cybersecurity is because I think that tech can scare people,” he said. “First off, we’re talking about things that are actually scary — things that keep me up at night. But also, people don’t want to feel like they’re going to be a code monkey, so to speak, sitting at a keyboard all day. So I try to emphasize the more exciting cases, the sort of weird and interesting stuff that we can do in cybersecurity.

“Cybersecurity is wide-ranging. There are people who analyze malware — they look at what’s in our software and how it spies on people and breaks their stuff and steals their info, or even drains their Bitcoin wallet, those kinds of things. There are folks who do digital forensics work — they may be looking at evidence and preparing it for a court case or even just an investigation or an audit of an organization.”

Then there are people who work at security operations centers like the one now located at the Richard E. Neal Cybersecurity Center of Excellence in Springfield, which help organizations detect, prevent, and respond to threats.

“When people talk about AI being a threat, what they really mean is generative AI being a threat, large language models being a threat. And just like AI had been used for defensive good purposes before, we can still take generative AI and use it for good purposes as well.”

“That’s a burgeoning field, being the individual who looks at a dashboard, sees all the information coming in, and makes conclusions and reports and even post-mortem analysis,” O’Brien explained. “Even after something has gone wrong, you need the individual who’s going to say, ‘well, here’s how it went wrong,’ and provide that report to the C-suite in an organization.”

Then there are individuals moving to cybersecurity from other fields — or vice versa — and incorporating it into other disciplines.

“I want to have folks who are managers, essentially, who are able to take all of this information, come up with security plans and risk management scenarios, and talk about security architecture and those kinds of things, because those don’t change no matter what goes on with the technology,” O’Brien told BusinessWest. “In my time — and I’ve been doing this since I was a kid, essentially — I have seen technology shift so much, but the fundamentals don’t change.”

In short, it’s a field broad enough to welcome people from any discipline or interest, and that, combined with the fact that it’s certain to remain important, makes cybersecurity an attractive career option.

“You’ve got to have the hunger for it, certainly,” he added. “That’s why it’s always fun to be around other cyber folks, because they’re always energetic.”

 

Future Shock

The keynote address at the Cybersecurity Summit was delivered by Scott Shapiro, a professor at Yale Law School. O’Brien met him years ago when he worked there, and the two of them co-founded a cybersecurity lab for Yale law students.

“We took folks who are non-technical, primarily — great legal minds, certainly, but not technical people — and we got them to use the command line. We got them to do hacks on their own,” O’Brien said. “We would say, ‘here’s why strong passwords are important. By the way, here’s how to crack a weak password.’”

Now in charge of Bay Path’s cybersecurity program, O’Brien is passionate about sparking that interest in young people.

Sean O’Brien (right) conducts a ‘fireside chat’ with Yale Law School Professor Scott Shapiro about advances in cybersecurity and AI during the recent Cybersecurity Summit.

Sean O’Brien (right) conducts a ‘fireside chat’ with Yale Law School Professor Scott Shapiro about advances in cybersecurity and AI during the recent Cybersecurity Summit.

“Bay Path, an amazing program, really has an innovative approach, which is one of the reasons they recruited me,” he told BusinessWest. “They said, ‘hey, you’re doing some cool and interesting things with cybersecurity, we’re doing cool and interesting things with cybersecurity, so let’s hang out.’”

Shapiro’s address — and ‘fireside chat’ discussion with O’Brien — touched numerous times on the role of AI in cybersecurity, and why it’s not all bad news.

“The first thing is to recognize that every tool can be used for good or for bad. A gun can be used either to defend yourself and your family in your home or to hold up a convenience store. And encryption — we love encryption when it protects our private communication; we hate it when it’s called ransomware,” said Shapiro, who is also the author of Fancy Bear Goes Phishing: The Dark History of the Information Age in Five Extraordinary Hacks.

He applied the same message to AI, after a quick history lesson explaining the difference between classical AI and generative AI, which is a much more recent phenomenon.

“AI has been part of cybersecurity for such a long time. You had very basic symbolic systems that helped detect for intrusions and exploitations. In the 2010s, you could not walk through a trade show without people telling you about their AI that protects everyone, and that was machine learning that tried to correlate usage with time, with location, and try to figure out the markers of a threat.

“Now, when people talk about AI being a threat, what they really mean is generative AI being a threat, large language models being a threat. And just like AI had been used for defensive good purposes before, we can still take generative AI and use it for good purposes as well.”

The bad purposes are plenty, Shapiro said, from deepfakes to malware. But in many ways, AI is simply sharpening the sort of threats that already existed.

On the traditional internet, O’Brien told BusinessWest, “we had things called botnets. These are automated computers that are being controlled by a command and control computer somewhere. So your grandmother’s TV set or set-top box or router can be controlled by some adversary somewhere on the other side of the world. You get enough of these machines talking together, they can attack websites; they can break stuff down. Those kinds of threats have been going on for a very long time.

“I would say what’s going on right now is AI is an accelerating force,” he went on. “We still have these threats; everything old is new again. But because AI is able to sort of think on its feet, it’s able to probabilistically change direction and try certain things very easily.”

During the Cybersecurity Summit, O’Brien talked about a botnet called Aisuru that was the most highly trafficked domain in the world during November — more than Google, Yahoo, Facebook, you name it — because of the ease with which it insinuated itself into everything from routers to cameras to gaming platforms. Its goal? Distributed denial of service attacks trying to take down websites.

That sort of threat takes cybersecurity out of the business realm and makes it everyone’s concern.

“Now that everybody’s online constantly, we have devices in our pockets which are basically supercomputers. We’re surrounded by devices, cameras, thermostats, all the stuff that’s connected to the internet. Cybersecurity is now a central topic. It’s encompassed so many aspects of our life,” he explained. “Chat GPT was released to the public a few years ago, and there is a real revolution in computing, and people are starting to see how these algorithms can do incredibly useful stuff, but also incredibly dangerous stuff.”

But AI can also be a strong weapon against those dangers.

“I remember old-style viruses. We had some Macs in our elementary school that got a virus, and everything went down. But then we started having virus detection engines — they look for signatures, and they react. AI is very good at this sort of signature detection and being very agile, being able to look at some things and say, ‘this looks like activity that shouldn’t be happening in the network.’

“So those detection tools, this ability to read through long logs of text, which is what people use ChatGPT and these types of technologies for anyway, are security tools that are speeding up the pace of action and analysis and giving cybersecurity analysts a lot more detailed information a lot more quickly.”

 

Always Watching

One reason O’Brien likes being an educator is seeing what students are actually interested in, and the way they think of new threats and new applications.

“The students are coming to us with scenarios that are interesting, their own ideas about unique hacks that could be happening. I had a student, for example, demonstrate for me a hack of a Roomba. I hadn’t thought much about a Roomba, but you think about a Roomba, it moves around, and it actually has a lot of data about the physical space,” he said.

“Having that surprise at this point in my life, after I’ve thought I’ve seen everything, is a really big part of this. I’m excited to see where things go.”

And that constant learning is yet another reason why cybersecurity careers will remain attractive — and why shepherding a new generation into that work is so important.

“I think it’s going to be hard to eliminate the need for cybersecurity folks, no matter what comes around the corner technologically,” O’Brien told BusinessWest. “We’ve got to stay on our feet. We’ve got to lock our things up.”

Opinion

Opinion

By Pam Thornton

 

Time is the most valuable currency in human resources, and it’s slipping away. Too many HR professionals are still hesitant to adopt artificial intelligence (AI), even as it quietly transforms industries all around us. The clock is ticking, and HR leaders who delay are risking falling behind.

AI is not a futuristic concept; it’s already embedded in daily tools you may be using. Microsoft, LinkedIn, Zoom, and Google all have AI-powered features that analyze, summarize, and automate routine work. According to a 2024 SHRM survey, 26% of organizations use AI to support HR-related activities.

What’s at stake? According to a Deloitte-based analysis, HR professionals spend up to 57% of their work time on administrative tasks, which is equivalent to more than 22 hours per week in a standard 40-hour work week. Imagine what could be achieved if those hours were reinvested into strategy, culture, and leadership development.

Here are some of the benefits of AI for HR:

• Time savings. AI-driven recruiting tools can reduce screening time by up to 75% while improving candidate fit.

• Better insights. Predictive analytics allow HR teams to anticipate turnover risks, identify skill gaps, and strengthen workforce planning.

• Improved compliance. AI-powered auditing tools can scan policies and employee records for inconsistencies and legal risks in minutes.

• Enhanced employee experience. Chatbots and virtual assistants now answer common HR and benefits questions 24/7, freeing human resources staff to handle complex employee relations conversations and high-value issues in the organization.

• Upskilling opportunities. AI helps identify internal talent ready for reskilling, closing skills gaps and reducing external hiring costs.

For HR professionals, the ‘wait and see’ approach is costly. Competitors who adopt AI now are gaining efficiency, reducing costs, and positioning HR as a true strategic driver. According to a study from Gartner, the share of HR leaders who are actively planning or already deploying GenAI has jumped from 19% in June 2023 to 61% in January 2025. This sharp rise highlights growing recognition of GenAI’s power to reshape HR processes.

We can’t just ‘lean on’ and set it and forget it when using AI. When we ‘lean in’ and provide input and human oversight to synthesize the information and use our critical thinking skills to leverage AI as a tool, we gain the strategic advantage. Humans will always remain at the heart of HR.

The message is clear: HR’s future isn’t AI versus human, it’s AI plus human. Those who embrace the tools today will lead the transformation tomorrow. So, the real question is: how much longer can you afford to wait?

 

Pam Thornton is director of Strategic HR Services for the Employers Assoc. of the NorthEast. This article first appeared on the EANE blog; eane.org

Technology

Fishing for Answers

By Sean Hogan

 

I recall attending a conference around 2016 where one of my friends and a speaker at the conference brought up artificial intelligence (AI) and machine learning and how they would change the way we do business.

At the time, I had no clue what he meant by that; I couldn’t imagine computers taking away our day-to-day tasks or improving our customer service. I was the one with crossed arms in the back of the room stating that “AI won’t replace my technicians and my support team.” We talked among our team, and we really didn’t see a fit for AI, nor did we truly understand what capabilities AI may have in the future.

Fast-forward 10 years, and I have embraced AI in the workplace. It started slowly; I used Microsoft Copilot to help write some policy and procedure pieces — you know, the tedious docs that no one wants to write, or read, for that matter. I found AI extremely helpful for writing.

Sean Hogan

Sean Hogan

“AI was helping us with time-saving technology, and machine learning was helping our tools become better day after day.”

AI then crept into several software tools in our tech stack. AI was helping us with time-saving technology, and machine learning was helping our tools become better day after day. The next step in our AI migration was to use ChatGPT to help with social media advertising — you know, those ads and images that everyone can tell is AI.

I even use AI to help out in my garden. I upload pictures of plants and ask for help, and AI can typically identify the plant. Case in point: I grew a pepper plant in my garden, but I had no clue what type of pepper. The taste test didn’t work out so much; my mouth was on fire for about an hour. I then took a picture and uploaded the picture to Chat, only to find that harmless-looking pepper was a thai green chili, which, according to Chat, is 10 to 20 times hotter that a jalapeno. Next time, I need to upload the picture before biting the pepper in half.

Eventually, I started hearing people in my circle saying they were no longer searching in Google, but were now exclusively searching in ChatGPT. Wait — this can’t be true? Well, not only did I find out it’s true, but its flat-out better. I have since been using ChatGPT for my searches. It is excellent for market research, background information, advice, and recipes. Yes, recipes — I find myself searching recipes often, without any advertising pop-ups or other distractions.

This has been my evolution of working with AI. I want to share a real-life story from my vacation this summer. This one really impressed me.

During a recent vacation in Montana, I found myself on one of my favorite stretches of water, the Boulder River, just outside Big Timber. I’ve fished this area before, but on this day, I hit a wall. Fish were feeding, but no matter what dry flies I cast, I couldn’t get a single strike. Frustration was setting in.

That’s when I turned to something new in my fishing gear: ChatGPT.

“Eventually, I started hearing people in my circle saying they were no longer searching in Google, but were now exclusively searching in ChatGPT.”

I pulled out my phone and entered details like the river, time of day, water temperature, and weather conditions into the AI. In seconds, ChatGPT offered several dry fly patterns and presentation tips I hadn’t tried. It recommended smaller dries, and subtle presentation adjustments, which made sense — but I wasn’t entirely confident in choosing the right fly.

I had recently purchased a new fly box filled with various dries, many of which I didn’t recognize. So I took a photo of the box and uploaded it to ChatGPT. Amazingly, it identified the specific flies in the compartments and told me exactly which one to use.

Taking that advice, I tied on a small dry fly and stacked it behind a larger, more visible fly for better tracking. The results were immediate. Within a few casts, I was landing fish — more than a few, in fact.

It was an eye-opener. While I usually stick to nymphing (sub-surface flies), this experience boosted my confidence with dry flies. Even more, it showed how AI can be a valuable tool on the river, especially when traditional tactics fall short.

Next time you’re out fishing and feel stumped, consider using a bit of tech. You might be surprised what a virtual fishing buddy can help you catch.

AI is still new — and I need to expand my view and come up with more real-life scenarios where AI can help.

 

Sean Hogan is president of Hogan Technology Inc.

Cybersecurity Special Coverage

Bracing for Change

By Delcie Bean

In 2024, artificial intelligence (AI) achieved significant milestones that have set the stage for transformative developments in 2025.

 

Key AI Milestones of 2024

Regulatory Frameworks: The European Union finalized its comprehensive AI Act, establishing a framework that balances innovation with ethical considerations. This legislative milestone is expected to influence global AI policies and governance.

Technological Advancements: Breakthroughs in AI-powered scientific discoveries, particularly in biomedicine, were highlighted by DeepMind’s AlphaFold, which demonstrated remarkable progress in protein folding. This advancement opened new avenues for drug development and biological research, showcasing AI’s potential to revolutionize science and healthcare industries.

Consumer Technology: The launch of the first AI-native smartphone, equipped with a dedicated AI chip, marked a shift toward more intelligent and personalized mobile devices. This innovation pushes the boundaries of user experience and sets the stage for future advancements in consumer electronics.

 

The Outlook on AI in 2025

Artificial intelligence continues to be one of the most transformative forces of our time, and 2025 is shaping up to be a pivotal year. As the pace of innovation accelerates, industries, businesses, and individuals are grappling with the opportunities and challenges AI presents. Among the current trends are:

Advancements in Generative AI: Generative AI is expanding beyond text, venturing into video production and other media forms. Tools like HeyGen, Sora, and Runway ML enable the creation of realistic and personalized video content, democratizing video production for businesses and individual creators.

AI Integration Across Sectors: Industries are adopting AI at scale in fields like:

Healthcare: AI-powered diagnostics, personalized treatment plans, and drug discovery are becoming mainstream, enhancing patient care and operational efficiency.

Finance: Predictive analytics and fraud-detection systems are improving efficiency and security in financial operations.

Manufacturing: AI-driven automation and predictive maintenance are optimizing production lines, reducing downtime, and increasing productivity.

 

Predictions for AI in 2025

2025 promises exciting developments and disruptions:

Technology Breakthroughs: AI models will become more powerful, efficient, and accessible. Recent advances in energy-efficient AI, such as Google’s Pathways model, suggest that future systems will require less computational power while delivering superior performance. Moreover, multimodal AI — capable of processing text, images, and videos simultaneously — will enhance virtual assistants, enabling them to understand and respond in richer contexts.

For example, consider a smart-home system that can analyze both audio commands and video input to adjust lighting, recommend entertainment, or detect potential hazards.

Consumer-centric AI: Apple’s rumored ventures into AI are likely to materialize in 2025, potentially redefining personal technology. Imagine an AI-driven iOS system that not only anticipates user needs but also offers proactive suggestions, such as ordering groceries or suggesting health routines based on daily activity patterns.

Industry Disruptions: AI will reshape several sectors, with standout changes in:

Education: Adaptive learning platforms like Squirrel AI are expected to evolve, offering highly personalized curriculums that cater to individual student needs. AI tutors could become commonplace, providing real-time feedback and assistance across subjects.

Logistics: Companies like Amazon and FedEx are already testing AI-driven autonomous delivery systems. By 2025, we might see widespread use of drone deliveries and autonomous vehicles in urban centers.

Urban Planning: Smart cities will leverage AI for everything from traffic management to waste reduction. Projects like Sidewalk Labs in Toronto are early examples of how AI can transform urban living.

Challenges and Considerations: Despite its promise, AI’s growth is not without hurdles:

Data Privacy and Security: As AI systems handle sensitive information, ensuring robust data protection will be crucial to maintaining trust.

• Bias and Inclusivity: Addressing biases in AI algorithms remains a pressing issue. Inclusive development practices are essential to prevent perpetuating inequalities.

• Economic and Social Impact: The balance between innovation and job displacement will be a critical conversation. Preparing for AI’s impact on the workforce is imperative for a smooth transition.

Opportunities for Businesses and Individuals: AI in 2025 isn’t just about challenges; it’s also about immense opportunities:

• Leveraging AI for Growth: Businesses of all sizes can use AI to gain a competitive edge. From automating routine tasks to enabling new product innovations, the potential is vast.

• Upskilling the Workforce: Training and reskilling will be key. Organizations investing in their employees’ AI literacy will thrive in the evolving landscape.

• AI as a Partner, Not a Threat: Collaborative human-AI workflows can enhance productivity and creativity, showing that AI complements human capabilities rather than replacing them.

 

Conclusion

As we look to 2025, AI’s trajectory is clear: it will become more integrated, powerful, and impactful across all facets of life. However, with great power comes great responsibility. It’s up to businesses, governments, and individuals to steer AI’s development toward ethical, inclusive, and beneficial outcomes.

The future of AI is not set in stone — it’s a story we’re all writing together. By staying informed, adapting to change, and embracing innovation, we can ensure that 2025 marks another milestone in AI’s journey toward improving lives and transforming industries.

 

Delcie Bean is CEO of Paragus Strategic I.T.

 

Insurance Special Coverage

Real Talk on Artificial Intelligence

By Timm Marini

Timm Marini, president of Personal Lines Insurance at Hub International New England.

Timm Marini, president of Personal Lines Insurance at Hub International New England.

Artificial intelligence can help give nonprofits a leg up with donors and benefactors, but better AI safeguards may be needed to defend against potential cyber threats and other technology-related risks. Here’s what your organization needs to know.

Nonprofits are increasingly incorporating artificial intelligence (AI) into their operations and communication platforms, with their integration efforts actually outpacing their private-sector counterparts 58% to 47%.

AI enables nonprofits to enhance stakeholder engagement and can help them access solutions to social problems they are working to address. About 70% of nonprofits believe generative AI will help them achieve their organizations’ sustainable development goals by enhancing productivity, improving access to information, and increasing awareness to drive policy change.

But AI also presents risks that could threaten a nonprofit financially, reputationally, and operationally.

 

How Nonprofits Are Using AI

AI has surged since 2020 thanks to swift advances in technology to generate text, images, and videos. Nonprofits are tapping into generative AI and its large language model (LLM) subset to create text from big sets of data to enhance efficiency and expand their reach. Additionally, nonprofits can use AI to automate repetitive tasks, including certain administrative duties like scheduling meetings, data entry, or volunteer management, so they can instead focus their limited employee and volunteer resources on other important work.

“About 70% of nonprofits believe generative AI will help them achieve their organizations’ sustainable development goals by enhancing productivity, improving access to information, and increasing awareness to drive policy change. But AI also presents risks that could threaten a nonprofit financially, reputationally, and operationally.”

Savvy organizations are also leveraging predictive AI to analyze donor data and gain insights into potential future donors. These insights can guide generative AI to create personalized appeals through targeted communications such as letters, advertising, and other content. Some AI applications are even more ambitious by providing actionable information to people looking to get involved in a cause or mobilize resources.

 

The Risks in AI — and How to Combat Them

Despite AI’s benefits, risks abound, including errors in word choice, tone, or potential copyright infringement in AI-generated materials. It is critical that organizations have a process to fact-check AI-generated materials and develop usage rules and policies for employees or volunteers supported by awareness training. Organizations should also consider media liability insurance against AI content-related claims of personal injury, copyright/trademark infringement, and plagiarism.

Cybercrime is another concern. AI has enabled cyber criminals to improve the speed, scale, and automation of cyber attacks. The technology can turbo-charge schemes like phishing or ransomware and be used to mimic voices of real people ‘authorizing’ fraudulent activities, known as ‘deepfakes.’

AI systems can be targets as well. If a threat actor was able to compromise a language model and poison the information within it, the outputs generated by AI algorithms leveraging that model could be damaging.

“Savvy organizations are also leveraging predictive AI to analyze donor data and gain insights into potential future donors.”

Unfortunately, many nonprofits are resource-challenged and increasingly vulnerable to cyber threats. About 68% of nonprofits have had at least one data breach in the last three years, 75% don’t actively monitor their networks, and more than 70% don’t run vulnerability assessments.

Every organization using or considering AI technology needs best practices and policies to protect against the potential risks. Here are some steps to consider:

• Document AI use policies. Organizations need to determine who can use public AI tools, and for what purpose. For instance, can business or personal email accounts be linked to the programs? How will access be managed — and by whom?

• Perform due diligence. Third-party AI tools that organizations or its vendors can buy, license, or access cause more than half of all AI failures, which includes providing inaccurate or copyrighted information. Organizations must thoroughly evaluate AI tools and the AI practices of any potential vendors to ensure they are guarding against threats. Rigorous contractual risk management — including hold-harmless, indemnification, and insurance provisions — is a must.

• Conduct awareness training. All staff should be trained in the use of AI tools and general cybersecurity protocols.

• Ensure risk management. An experienced broker is an invaluable resource to help organizations assess their cyber risk. Organizations should work with their broker to ensure they have the right insurance for AI-related exposures, such as cyber insurance and intellectual-property coverage.

Contact HUB International’s nonprofit insurance specialists to learn more about how to protect yourself against AI-related risks and take full advantage of the technology.

 

Timm Marini is president of Personal Lines Insurance at Hub International New England.

 

Law Special Coverage

Attention, Employers

By Sabba Salebaigi-Tse, Esq.

Artificial Intelligence (AI) is rapidly changing how we live and work. To keep up with this technological revolution, both federal and state governments are introducing new rules to ensure AI is used responsibly in the workplace. Here’s an overview of what you need to know about recent federal, state, and local AI developments.

 

The White House’s Executive Order

In October 2023, President Biden issued a groundbreaking executive order on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” This order pushed federal agencies to create guidelines ensuring AI is used responsibly, especially at work. The goal is to make sure AI helps improve workplaces without causing unfair treatment or discrimination.

Sabba Salebaigi-Tse

Sabba Salebaigi-Tse

“Ensure transparency by clearly communicating to employees and applicants about the use of AI in employment decisions and their rights related to AI.”

Department of Labor’s New Guidelines

Wage and Hour Division’s Bulletin: On April 29, the Department of Labor (DOL) Wage and Hour Division released a bulletin explaining the risks of using AI at work. This bulletin emphasizes the inherent risks associated with AI use and underscores that AI should not replace human oversight. According to the guidelines outlined in FAB, employers must ensure that responsible human oversight accompanies the deployment of AI technologies.

Given the various challenges associated with AI technologies, it is crucial for employers to navigate the complexities while adhering to laws like the Fair Labor Standards Act (FLSA) and others, which stipulate that employers remain accountable for legal issues arising from the use of AI. Even if AI systems autonomously take adverse actions against employees, such actions could potentially constitute retaliation under FLSA and related statutes.

 

Guidance of Federal Contractors: On April 29, the DOL Office of Federal Contract Compliance Programs issued guidelines aimed at federal contractors utilizing AI, which are valuable for all employers to consider.

These guidelines emphasize several critical practices for the ethical and effective deployment of AI tools in the workplace. Employers are advised to ensure that AI technologies are not only fair and job-related, but also regularly monitored for biases that could inadvertently impact decision-making processes. Additionally, keeping employees well-informed about the use and implications of AI systems fosters transparency and helps mitigate potential concerns or misunderstandings.

“As AI continues to evolve and integrate into the workplace, new and expanded laws will emerge to govern its use. Employers must proactively adapt to these changes to harness AI’s benefits while ensuring compliance with legal standards.”

These proactive measures not only enhance compliance with federal regulations, but also promote a more inclusive and equitable work environment where AI technologies are used responsibly to benefit both employers and employees alike.

AI Principles for Employers: On May 16, the DOL introduced a comprehensive set of principles aimed at guiding the development and implementation of AI technologies in the workplace. These principles underscore the importance of ethical considerations and employee welfare in AI deployment. They stress the need to keep workers informed about how AI is utilized, ensure transparency in AI decision-making processes, and safeguard worker data throughout the entire AI life cycle.

These guidelines aim to foster a fair and secure work environment where AI enhances operations while upholding privacy and ethical standards. Adhering to these principles helps employers build trust, mitigate risks, and integrate AI technologies responsibly for the benefit of all stakeholders.

 

State-level Developments

New York: Since July 5, 2023, New York city has a law regulating automated employment decision tools (AEDTs). Employers must conduct annual audits to check for bias, publish the results, and let applicants know when AEDTs are used. In addition, a new bill introduced this past February aims to regulate AEDTs across New York State. This bill requires annual bias analyses and public summaries of the findings.

New Jersey: In February, two bills were introduced in New Jersey to manage AI in hiring. One bill requires annual bias audits for AEDTs. The other regulates AI-enabled video interviews, demanding transparency and consent from applications.

Other States: California is working on regulations to prevent algorithmic discrimination and ensure AI tools are used transparently and responsibly. Starting Feb. 1, 2026, Colorado will require AI developers and users to protect against discrimination with high-risk AI systems. And both Illinois and Maryland have laws in place requiring employers to notify and get consent from applicants before using AI in hiring.

 

What Should Employers Do?

To navigate these new regulations and ensure compliance, employers should:

• Stay informed. Regularly review federal and state guidelines on AI use in the workplace.

• Conduct regular audits of AI tools to detect and mitigate bias or inequitable outcomes.

• Ensure transparency by clearly communicating to employees and applicants about the use of AI in employment decisions and their rights related to AI.

• Provide training to HR and management teams on the ethical and responsible use of AI tools.

• Consult with legal experts to say ahead of regulatory changes and implement best practices tailored to your organization.

 

Conclusion

As AI continues to evolve and integrate into the workplace, new and expanded laws will emerge to govern its use. Employers must proactively adapt to these changes to harness AI’s benefits while ensuring compliance with legal standards. If you have questions about any of these developments, it is prudent to consult with labor and employment counsel.

 

Sabba Salebaigi-Tse is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Features

It’s Not Going Away

By Linn Foster Freedman

Consumers have embraced the use of artificial intelligence (AI) tools in their everyday lives since ChatGPT was introduced into the economy last year. Employees are using AI technology in their workplaces, which causes risks to companies. In addition, third-party vendors are embedding AI technology into their products and services, often without companies’ knowledge, and are using company data to teach AI tools.

This article provides practical tips to evaluate the use of AI tools within an organization and by third-party vendors, how to minimize that risk, and how to approach the use of AI tools as technology advances.

Although AI technology has been in existence for decades, it has become mainstream over the past year with the arrival and novelty of ChatGPT’s use by consumers. When consumers embrace technology before companies, it is only a matter of time before consumers start to migrate that use into the workplace, whether it is approved or not.

Companies are struggling with how to introduce AI tools into their environment, as the risks associated with AI tools have been well-documented. These include copyright infringement, use and disclosure of personal information and company confidential data, bias and discrimination, hallucinations and misinformation, security risks, and legal and regulatory compliance risks.

These risks are real and compelling, especially when employees are sharing company data with AI tools. Once employees upload company data to an AI tool, that data may be used by the AI tool developer to teach its AI model, and the company’s confidential data may now be publicly available. Further, many companies are embedding AI into their products or services, and if you are disclosing confidential company data to vendors, they may be using your data to teach their AI tools or feeding your confidential data to other third-party AI tools.

Linn Foster Freedman

Linn Foster Freedman

“Companies are struggling with how to introduce AI tools into their environment, as the risks associated with AI tools have been well-documented.”

The risk is daunting, but manageable with strategy and planning. Here are some tips on how to wrap your arms around your employees’ use of AI tools in your organization. Tips to manage the risk of vendors using AI tools will be addressed later on.

 

Tips for Evaluating Your Organization’s Use of AI Tools

1. Don’t put your head in the sand. AI is here to stay, and your employees are already using it. They don’t understand the risk, but it seems cool, so they are and will continue using it. They will use any tool that will make their jobs easier — that’s human nature. Embrace this fact and commit to addressing the risk sooner rather than later. Ignoring the issue will only make it worse.

2. Don’t prohibit the use of AI tools in your organization. AI tools can be used to increase efficiencies in the workplace and increase business output and profits. Prohibiting its use will put you behind your competition and be a failed strategy. Your employees will use AI tools to make their work lives more efficient, so getting ahead of the risk and communicating with your employees is essential to evaluate and develop the use of AI in your organization.

3. Find out who the entrepreneurs and AI users are in your organization. Encourage the entrepreneurs in your organization to bring use cases to your attention and evaluate whether they are safe and appropriate. There are many uses of AI tools that do not present risks. The use cases should be evaluated, and proper governance and guardrails should be implemented to minimize risks.

4. Develop and implement an AI governance program. While AI tools are developing rapidly, it is essential to have a central program that will govern its use, internally and externally. Gather an AI governance team from different areas in the organization that will be responsible for keeping a tab on where and when AI is used; a process for evaluating uses, tools, and risks; putting guardrails and contractual measures in place to reduce the risk; and processes to minimize the risk of bias, discrimination, regulatory compliance, and confidentiality. The team will start slow, but once processes are in place, they will mature and pivot as technology develops.

5. Communicate with your employees often about the risks of using AI tools, the company’s AI governance program, and the guardrails you have put in place. Companies are better now than ever at communicating with employees about security risks, particularly email phishing schemes. Use the same techniques to educate your employees about the risks of using AI tools. They are using ChatGPT because they saw it on the news or one of their friends told them about it. Use your corporate communications to continually educate your employees using AI tools in the company and why it is important that they follow the governance program you have put in place. Many employees have no idea how AI tools work or that they could inadvertently disclose confidential company information when they use them. Help them understand the risks, make them part of the team, and guide them on how to use AI tools to improve their efficiency.

6. Keep the governance program flexible and nimble. No one likes another committee meeting or extra work to implement another process. Nonetheless, this one is important, so don’t let it get too bogged down or mired in bureaucracy. Start by mapping the uses of AI in the organization, evaluating those uses, and learning from that evaluation to become more efficient in the evaluation process going forward. Put processes in place that can be replicated and eventually automated. The hardest and most important work will be setting up the program, but it will get more efficient as you learn from each evaluation. The governance program is like a mini-AI tool in and of itself.

7. Be forward-thinking. Technology develops rapidly, and business organizations can hardly keep up. This is an area on which to stay focused and forward-thinking. Start by having someone responsible for staying abreast of articles, research, laws, and regulations that will be important in developing the governance program. Right now, a great place to start is with the White House’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. It gives a forward-thinking view of the development of regulations and compliance around AI that can be used as a prediction of what’s to come for your governance program.

8. Evaluate the risk of the use of AI tools by vendors. The AI governance team should be intimately involved with evaluating vendors’ use of AI tools, which is discussed in more detail below.

 

Tips for Evaluating the Risk of Use of AI Tools by Vendors

1. Carefully map which vendors are using AI tools. It might not be readily apparent which of your vendors use AI tools in their products or services. Team up with your business units to question which vendors are or may be using AI tools to process company data. Then, evaluate what data is disclosed and used by those vendors and determine whether any guardrails need to be put in place with the vendor.

2. Implement a process with business units to question vendors upfront about using AI tools. Business units are closest to the relationship with vendors, providing services to the business unit. Provide questions for the business units to ask when pursuing a business relationship with a vendor so you can evaluate the risk of using AI tools at the start. The AI governance team can then evaluate the use before contract negotiations begin.

3. Insert contractual language around the disclosure and use of company data and using AI tools. Companies may wish to consider developing an information security addendum (ISA) for any vendor with access to the company’s confidential data if they do not have one in place already. As the AI governance team evaluates the disclosure and use of company data to new vendors and the use of AI tools when processing company data, vendors should be questioned on the tools used, security measures used to protect company data (including from unauthorized use or disclosure of AI tools), and contractual provisions on the use of AI. Contractual language should be clear and concise about the vendor’s obligations and the remedies for a breach of the obligations, including indemnification. This language can be inserted in the ISA or the main contract.

4. Evaluate and map existing vendors’ use of AI tools. There may be some vendors you have already contracted with that are using AI tools to process confidential company information of which you are not aware. Prioritize which vendors have the highest risk of processing confidential company data with AI tools and review the existing contract. If applicable, request an amendment with the vendor to put appropriate contractual language in place addressing the processing of company confidential information with AI tools.

5. Add the evaluation of AI tools to your existing vendor-management program. If you have an existing vendor-management program in place, add the use of AI tools into the program going forward. If you don’t have an existing vendor-management program in place, it’s time to develop one.

 

Conclusion

Now is the time to implement a strategy and plan around the use of AI tools within your organization and externally by your vendors. It seems daunting, but the risk is clear and will be present until you address it. Hopefully, the tips in this article will help you start taking control of AI use in your organization and by your vendors and minimize the risk, so you can use AI to make your business more efficient and profitable.

 

Linn F. Freedman is a partner and chair of the Data Privacy + Cybersecurity Team at Robinson+Cole.

Law

A Brave New Year

By Lauren C. Ostberg, Esq. and Michael McAndrew, Esq.

 

Artificial intelligence — specifically, natural-language chatbots like ChatGPT, Bard, and Watson — have been making headlines over the past year, whether it’s college writing teachers’ attempts to avoid reading machine-generated essays, the boardroom drama of OpenAI, the SAG-AFTRA strike, or existential anxiety about the singularity.

On the frivolous end of the spectrum, one of the authors of this piece used ChatGPT to find celebrity lookalikes for various attorneys at their firm, and learned that ChatGPT defaults to the assumption that, irrespective of race or gender or facial features, most people (including Lauren Ostberg) look like Ryan Reynolds. On the more serious end, the legislatures of state governments, including those in Massachusetts and Connecticut, have labored over bills that will harness, regulate, and investigate the power of AI.

Lauren Ostberg

“The legislatures of state governments, including those in Massachusetts and Connecticut, have labored over bills that will harness, regulate, and investigate the power of AI.”

In Massachusetts, for example, the Legislature is considering two bills, one (H.1873) “To Prevent Dystopian Work Environments,” and another (S.31) titled “An Act Drafted with the Help of ChatGPT to Regulate Generate Artificial Intelligence Models Like ChatGPT.” The former would require employers using any automatic decision-making system to disclose the use of such systems to their employees, and give employees the opportunity to review and correct the worker data on which those systems relied. The latter, sponsored by Hampden County’s state Sen. Adam Gomez, aims to regulate newly spawned AI models.

While the use of AI to draft S.31 is, in its own right, an interesting real-world application of AI, the use of AI in this way is not the only important part of S.31, which proposes a regulatory regime whereby “large-scale generative artificial intelligence models” are required to register with the attorney general. In doing so, AI companies would be required to disclose detailed information to the attorney general, including “a description of the large-scale generative artificial intelligence model, including its capacity, training data, intended use, design process, and methodologies.”

In addition to requiring the registration of AI companies, S.31 (if passed) would also require AI companies to implement standards to prevent plagiarism and protect information of individually identifiable information used as part of the training data. AI companies must “obtain informed consent” before using the data of individuals. To ensure compliance, the bill gives the AG enforcement powers and grants it the authority to propound regulations that are consistent with the bill.

While S.31 provides robust protections against using data garnered from citizens of the Commonwealth in programming AI models, it may fail because of the amount of disclosure required from AI companies. As part of a new and fast-moving field, AI companies may be hesitant to disclose their processes, as is required by S.31.

Michael McAndrew

Michael McAndrew

“This proposed legislation is, of course, just the beginning of government’s attempts to grapple with the ‘responsible use’ (an Orwellian term, if ever there was one) of AI and technology.”

Though commendable in its effort to protect creators and citizens, S.31 may ultimately drive AI-based businesses out of the Commonwealth if they fear that their competitively sensitive AI processes will be disclosed as part of the public registry envisioned by S.31. However, the structure of the proposed registry of AI businesses is currently unclear; only time will tell how much information will be available to the public. Time will also tell if S.31 (or H.1873, referenced above) makes it out of committee and into law.

Meanwhile, in Connecticut

This past June, Connecticut passed a law, SB-1103, that recognizes the dystopian nature of the government using AI to make decisions about the treatment of its citizens. It requires that — by, on or before Dec. 31, 2023 — Connecticut’s executive and judicial branches conduct and make available “an inventory of all their systems that employ artificial intelligence.” (That is, it asks the machinery of the state to reveal itself, in part.)

By Feb. 1, 2024, the executive and judicial branches must also conduct (and publicly disclose) an “impact assessment” to ensure that systems using AI “will not result in unlawful discrimination or a disparate impact against specified individuals.” ChatGPT’s presumption, noted above, that every person is a symmetrically faced white man would be much more serious in the context of an automated decision-making system that impacts the property, liberty, and quality of life of Connecticut residents.

This proposed legislation is, of course, just the beginning of government’s attempts to grapple with the ‘responsible use’ (an Orwellian term, if ever there was one) of AI and technology. Massachusetts has proposed the creation of a commission to address the executive branch’s use of automated decision making; Connecticut’s new law has mandated a working group to consider an ‘AI Bill of Rights’ modeled after a federal blueprint for the same. The results — and the inventory, and the assessments — remain to be seen in the new year.

 

Lauren C. Ostberg is a partner, and Michael McAndrew an associate, at Bulkley Richardson, the largest law firm in Western Mass. Ostberg, a key member of the firm’s intellectual property and technology group, co-chairs the firm’s cybersecurity practice. McAndrew is a commercial litigator who seeks to understand the implications and risks of businesses adopting AI.

Technology

Protecting Yourself from IT Threats

By Charlie Christensen

 

As hackers, organized crime syndicates, and state-backed bad actors aggressively pursue ways to compromise the world’s data; business owners, leadership, and IT professionals continue to seek ways to counter these ever-growing threats to their information technology infrastructure. In this article, I will explore some of these threats, as well as the advancements in anti-virus/malware protection that are working to defend corporate and personal data every minute of every day.

Lastly, I will provide you with some key steps you should take to protect your business and data assets from attack.

Charlie Christensen

Charlie Christensen

The notion that you are just too small a company to worry about these threats, or that no one wants your data is a fallacy. Criminals are targeting small companies every day because they are easy targets.”

As someone who understands the threats we as IT professionals see every day, it is my hope that I can use this opportunity to provide the average businessperson with a better understanding of what they should focus on most urgently in today’s technology environment, and how they can better protect their business from being compromised.

• Ransomware: This is every company’s worst nightmare and is a topic that we could dedicate an entire article on. In short, ransomware is an extortion scheme that costs businesses billions of dollars per year. It most commonly spreads via malicious email attachments or links, software apps, infected external storage devices, and compromised websites.

Ransomware searches out every computer on the network and seeks to encrypt the data it finds. The only way to get the data back is to pay the extortion, usually via cryptocurrency which is largely untraceable. Not content with simple extortion, cybercriminals are now adding an additional element to the ransomware scheme.

Attackers will now download your data prior to encryption, and if you refuse to pay, they will threaten to release your data into the public domain. If the thought of this doesn’t lead you to a few sleepless nights, it should.

• Phishing, spear phishing, and whaling attacks: I think by now we all understand phishing. An attacker uses social-engineering techniques, like an enticing looking link, to get the end user to disclose some form of personal information such as a Social Security number, information, credentials, etc. Spear phishing, however, is a bit more focused and targeted. A spear-phishing message might seem like it came from someone you know or a familiar company like your bank or credit card company, shipping company, or a frequented retailer.

Whaling, on the other hand, goes after high-value targets such as C-level leadership or accounts payable. A whaling attack might look like an email from the CFO asking you to initiate a transfer to pay a large invoice. This is an incredibly common attack vector and one that relies on your team’s ability to identify it. Education and vigilance are your best defense.

• Advanced persistent threats: APTs happen when an intruder gains access to your systems and remains undetected for an extended period. They seek to quietly extract data such as credit card data, social security numbers, banking information, and credentials. Detection relies on the ability to identify unusual activity such as unusual outbound traffic, increased database activity, network activity at odd times. APTs also likely involve the creation of backdoors into your network.

• Insider threats: Although we are fixated on external threats, internal threats are more common and can be equally as damaging. Examples of intentional and unintentional threats include:

Intentional threats such as employees stealing data by copying or sending sensitive or proprietary data outside the company. This may occur via email/FTP, USB drive, cloud drive (One Drive, Dropbox, iCloud), or some other means. Often, these happen because someone fails to comply with security protocols because they are perceived to be inconvenient or “overkill.”.

Unintentional threats might include an employee clicking on a phishing email, responding to a pop up asking for credentials, not using a strong password, or using the same password for everything. It could also be a system that was not patched, a port that was left open on a firewall, or forgetting to lock a user account after termination.

• Viruses and worms: Frequently considered to be ‘old school’ threats, these still exist and can cause tremendous damage. Users should be careful about clicking on ads, file sharing sites, links in emails, etc. Their purpose is to damage an organization, systems, data, or network. However, traditional anti-virus software is usually effective at controlling them.

• Botnets: Simply put, a botnet is a collection of devices that have access to the internet like PCs, servers, phones, cameras, time clocks, or other commonly found networked devices. These devices are then infected by malware that allows criminals to use them to launch attacks on other networks, generate spam, or create other malicious traffic.

• Drive-by attacks: These are infected graphics or code on a website that gets injected into your computer without your knowledge. They can be used to steal personal information, or inject trojans, exploit kits, and other forms of malware.

While this list might seem exhausting, it only represents a few of the more common attack methods that we see daily. It also helps explain the emergence of a new generation of security products and platforms. To better understand how we look at information security, let me borrow one of the examples I commonly use when speaking to businesspeople and groups about building an effective Information Security Program.

Think of information security as an onion. Like an onion, information security programs are comprised of layers (firewall, backup, AV, email filtering, etc…) of protection surrounding the core (your data). As we build an information security program, we need to put layers of protection between the threat and the asset we are trying to protect. While the details of an information security program are outside the scope of this article, for the purposes of this discussion you only need to understand that there is no single magic product that can protect you from all threats. Anti-virus, or even the new generation endpoint detection and response (EDR) products are but one layer of protection in an over-arching strategy to protect your business from modern threats.

A brief history of antivirus (AV) products has them coming onto the scene in the late 1980s, with familiar names like McAfee, Norton, and Avast. These early products relied on signature-based definitions. Much like you look up a word in the dictionary, these AV products could catch defined threats, but they would easily fail to prevent attacks that had yet been discovered; or worse, that they had not yet downloaded an update for that would allow them to recognize the threat. Traditional AV changed very little until several years ago with the advent of Next Generation Antivirus. NGAV uses definitions coupled with predictive analytics driven by machine learning to help identify undefined threats.

The latest technology to hit the market is enhanced detection and response (EDR) or extended detection and response (XDR). These technologies continue to use traditional signature-based antivirus and NGAV, but they also introduce the use of artificial intelligence (AI).

AI is used to constantly analyze the behavior of devices so it can detect abnormal activities like high CPU usage, unusual disk activity, or perhaps an abnormal amount of outbound traffic. This new generation of software not only detects an attack and warns you that it is occurring, but it can also isolate the attack to the device(s) that are infected by automatically taking them off the network and protecting the rest of your network. Some EDR products like SentinelOne also have threat-hunting capabilities that can map the attack as it unfolds. This mapping aids IT professionals in the identification of devices involved in the attack; a process that can take days or weeks when performed manually. XDR even goes a bit further in that it looks beyond the endpoint (PC, laptop, phone) and looks at the network holistically.

A good example of how EDR systems are being used as a layer of protection is how SonicWall firewalls combine a physical firewall with a suite of security capabilities like content filtering, DPI-SSL scanning, geo-blocking, gateway antivirus, and more to filter traffic before it enters your network. Then, with the addition of their Capture Client product (a collaboration between SonicWall and SentinelOne), they integrate the power of SentinelOne EDR with the firewall’s rules. This allows you to extend protections beyond devices inside the network and include company devices outside the network as well. This helps to eliminate gaps in protection that can exist with remote users.

The notion that you are just too small a company to worry about these threats, or that no one wants your data is a fallacy. Criminals are targeting small companies every day because they are easy targets. Large companies have armies of highly educated and well-paid people protecting their networks. And while a large company might represent a big score, hackers can spend years trying to penetrate a large network. However, they know smaller organizations have limited budgets and staff to protect their network. This makes it far more lucrative to hit 50 or 100 small companies for $100,000 than a single large company for, say, $2 million.

Investing in modern security products, building a sound information security program, and educating your team will pay off in the long run, as the question is not if you will be attacked — but when. The cost of the systems to protect you is far less the frequently irreparable harm caused by a breach or infection.

Many people say, ‘I have cyber insurance,’ but fail to put the necessary precautions in place to protect their systems and data. Little do they know that when they filled out the pre-insurance questionnaire and answered ‘yes’ to all the questions, they gave the insurer the ability to deny the claim. If you do not have written policies, use EDR (or at least NGAV), have a training program in place, and use multifactor authentication to protect user logins, you could be sealing your own fate. Insurers are no longer baffled by today’s technology and are aggressively investigating cyber claims. In fact, we are seeing significantly increasing numbers of denied claims.

There is little you can do after the fact to offset missing protections or enforcement of policies. By taking the appropriate steps to protect your network and systems you can hopefully minimize the risk of falling victim to an attack and ensure that your insurer will cover such a claim. Insurance companies will go to great lengths to cover legitimate claims at great cost. In fact, they can be their own worst enemy. In many ransomware attacks, insurance companies will simply pay the ransom because it is more expeditious to do that than it is to pay for the actual remediation. This, of course, only encourages the criminals while leading to higher premiums and greater risk to our technology infrastructure.

To close, I’d like to leave you with a few things that you can do to better protect your systems, data, and network.

• Take the time to understand what protections you have in place and engage a professional to help you identify any gaps in your information security strategy;

• Educate your staff on information security best practices and the threat spectrum. An educated workforce is one of your best protections. There are several great training tools that are inexpensive and easy to implement, such as KnowBe4;

• Implement a next-generation firewall that utilizes deep packet inspection and take the time to dial in the suite of security features that are designed to stop threats before they get into the network;

• Move to an EDR system rather than relying on a traditional signature-based antivirus;

• Be sure that all systems with access to your networks (computers, network equipment, servers, firewalls, IoT devices, cameras, etc.) are patched regularly to eliminate vulnerabilities that can be easily exploited;

• Do not run unsupported operating systems, equipment, or applications;

• Establish a set of written information security policies, and make sure everyone understands that they need to live by them; and

• Limit those with administrative credentials on your network. If an administrative account is compromised, you have given away the keys to the kingdom. Make sure users only have permission to get to the resources they need to do their job.

 

Charlie Christensen is president of East Longmeadow-based CMD Technology Group; http://www.new.cmdweb.com/; (413) 525-0023.