Netflix Adds Generative AI To Competitive Risk Factors in Its Annual Report

In a change that reflects AI's growing influence -- and potentially disruptive power -- in Hollywood, Netflix added generative AI to the list of potential risk factors on its annual report filed with the SEC. From a report: In Netflix's 10-K report filed Friday, it added this new section to the long section of risk factors (which are required under SEC rules) in the section about video competition: '[N]ew technological developments, including the development and use of generative artificial intelligence, are rapidly evolving. If our competitors gain an advantage by using such technologies, our ability to compete effectively and our results of operations could be adversely impacted.'

Netflix also added this wording: 'In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property claims, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain.' Aside from those two sections, the risk factors on Netflix's 10-K for 2023 -- totaling some 10,000 words -- remained largely the same. To be sure, the changes here are very small, in the grand scheme of things. And keep in mind that these are all the potential risk factors that companies like Netflix must communicate to investors.

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