US regulator denies Apple, Disney bids to skip votes on AI

FILE PHOTO: llustration shows AI (Artificial Intelligence) letters and computer motherboard

By Ross Kerber

(Reuters) - Apple and Disney cannot avoid shareholder votes about their use of artificial intelligence put forward by a labor group, the top U.S. securities regulator has ruled.

In notices dated Jan. 3, the U.S. Securities and Exchange Commission rejected requests by the iPhone maker and by the entertainment giant to exclude from their upcoming annual meetings calls for reports on their use of AI.

Corporations have embraced the new technology for its promised efficiencies. But the trend has prompted fears it would replace many creative and professional workers or unfairly draw on their work, issues in recent Hollywood labor disputes and a recent New York Times lawsuit.

The similar shareholder proposals were filed by a pension trust of the AFL-CIO, the largest American labor union federation, which also has AI measures pending at four other technology companies.

At Apple, the group asked for a report on the company's use of AI "in its business operations and disclose any ethical guidelines that the company has adopted regarding the company’s use of AI technology." In a similar request, it also asked Disney to report on its board's role overseeing AI usage.

In its supporting statement at Apple the AFL-CIO wrote that "AI systems should not be trained on copyrighted works, or the voices, likenesses and performances of professional performers, without transparency, consent and compensation to creators and rights holders."

Brandon Rees, deputy director of the AFL-CIO's office of investment, said the SEC's decisions could pave the way for agreements with Apple and Disney that would only bring them into line with the AI disclosures of other companies like Microsoft.

Apple and Disney, in contrast, "haven't even begun to grapple with these ethical issues" around AI, Rees said.

Apple and Disney did not immediately responded to requests for comment.

Both companies had argued the proposals could be left off their ballots because they related to "ordinary business operations," such as the company's choice of technologies.

The SEC disagreed. "In our view, the Proposal transcends ordinary business matters and does not seek to micromanage the Company," the agency wrote in separate letters.

(Reporting by Ross Kerber; editing by Jonathan Oatis)