Credit: Inside the MagicThe Walt Disney Company has been ordered by a powerful governmental agency to be transparent about how it uses artificial intelligence, adding another hot-button topic for its shareholders to consider in addition to CEO Bob Iger’s upcoming proxy battle.
Disney had previously asked the United States Security and Exchange Commission (SEC) to allow it to exclude reports on its AI usage from annual meeting calls, the main venue for shareholders to learn what a corporation is currently planning for the future.
Related: Could Artificial Intelligence Replace Beloved Disney Characters Soon?
The SEC shut that down (per Reuters), telling Disney that it must be transparent to shareholders and include proposals from the AFL-CIO Equity Index Funds in its next meeting call. In a letter to Disney, the SEC said:
“The Proposal requests that the Company prepare a transparency report that explains the Company’s use of artificial intelligence in its business operations and the board’s role in overseeing its usage, and sets forth any ethical guidelines that the Company has adopted regarding its use of artificial intelligence.”
“We are unable to concur in your view that the Company may exclude the Proposal under Rule 14a-8(i)(7). In our view, the Proposal transcends ordinary business matters and does not seek to micromanage the Company.”
The full letter can be read here:
The AFL-CIO is the largest American labor union federation and has been actively working to push large tech companies like Apple (which received a similar order from the SEC) and Disney to more openly disclose their future plans for AI technology.
The ethical issues around generative AI have been a huge issue in Hollywood in the last several years and were a primary factor in the recent WGA and SAG-AFTRA strikes that ground the entertainment industry to a standstill last year.
Related: Disney Takes Brutal Action Against Artificial Intelligence
Companies like Disney, Warner Bros. Discovery, and Universal were all accused of practices like pressuring background actors to give up their likeness rights in perpetuity, which, combined with AI technology, would essentially allow studios to bypass all kinds of union requirements and ordinary business operations.
Disney being forced to be more transparent about its AI usage with its shareholders is a big step for the industry and very well may be a landmark in governmental intervention in a new and developing technology. We will update this story with further information as it emerges.
Inside the Magic reached out to Disney for comment, but has not heard back by the time of publishing.
What do you think about the SEC intervening in Disney’s business? Let’s hear your thoughts in the comments below!