Apple, Disney’s requests to avoid votes on AI rejected by US SEC

Apple (NASDAQ:AAPL) and The Walt Disney Company (NYSE:DIS) cannot avoid shareholder votes about their use of artificial intelligence place forward by a labor group, ruled the U.S. Securities and Exchange Commission, Reuters reported.

The U.S. SEC rejected requests by Apple and Disney to exclude from their upcoming annual meetings calls for reports on their use of AI, the report added citing the agency’s notices.

Organizations are embracing the new technology for its potential efficiencies. However, the trend has induced fears that it would replace many creative and professional workers or take from their work. Issues such as the Hollywood labor disputes and a recent lawsuit by The New York Times (NYT) against Microsoft (MSFT) and OpenAI for copyright infringement.

The similar shareholder proposals were submitted by a pension trust of the American Federation of Labor and Congress of Industrial Organizations, or AFL-CIO, which also has AI measures pending at four other technology companies.

At Apple, the group requested 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.” Similarly, the group also requested Disney to report on its board’s role overseeing AI usage, the report noted.

In its supporting statement at Apple the AFL-CIO noted 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,” according to the report.

Brandon Rees, deputy director of the AFL-CIO’s office of investment, said the SEC’s rulings could pave the way for agreements with Apple and Disney which would bring them into line with the AI disclosures of other companies such as Microsoft (MSFT).

The two companies had claimed that the proposals could be avoided from the ballots because they pertained to “ordinary business operations,” like the company’s choice of technologies. However, the SEC disagreed.

The regulator noted that, “in our view, the Proposal transcends ordinary business matters and does not seek to micromanage the company,” the report added.

Generative AI services have taken the world by storm since the launch of Microsoft-backed OpenAI’s ChatGPT last year.

However, use of intellectual property and how AI could impact workforce remains to be seen.

In a landmark case in the U.K., in December 2023, an American computer scientist named Stephen Thaler lost his appeal to register patents on inventions created by his AI system. Thaler had lost a similar appeal in the U.S. Supreme Court in April 2023.