Beyond job displacement: Operational fragility is the real AI risk

In mainstream discourse, AI is widely anticipated to displace certain professions, reducing the role of human expertise across a broad spectrum of industries.

This focus, while understandable, addresses only the most immediate and visible potential impact of automation, framing the issue as a zero-sum game between human labor and technology. Extensive research presents a nuanced reality where AI is more likely to automate specific tasks rather than eliminate entire vocations.

For professionals tasked with corporate governance, risk management and legal compliance, a more nuanced and pressing reality is emerging. The central challenge lies not in AI's ability to replace humans, but in the operational fragility and systemic vulnerabilities introduced when businesses become overly reliant on these systems.

New dependencies: Third-party risk and regulatory gaps

AI systems represent a powerful instrument for enhancing efficiency, but this very efficiency is paradoxical. As organizations embed AI into essential workflows, they create new dependencies and reshape the risk landscape. While AI-related EU legislation mainly focuses on ethical considerations, bias mitigation and safety compliance, and cybersecurity-related legislation that emphasizes digital resilience, these legislative frameworks do not explicitly address certain business continuity and disaster recovery issues arising from AI dependency or third-party lock-in.

This gap is often exploited in vendor relationships. Many AI solution providers follow a similar business model: they often offer services at a lower cost while seeking to leverage clients' data to enhance their own AI models. AI solution providers typically classify themselves as data processors under applicable EU laws, thereby shifting most responsibilities to their clients and often limiting or even excluding their own liability.