Crafting an AI Compass: The Influence of Global AI Standards on Firms

111 Pages Posted: 26 Jun 2023 Last revised: 10 Apr 2024

See all articles by Mehmet Canayaz

Mehmet Canayaz

Pennsylvania State University - Smeal College of Business

Zhe Wang

Pennsylvania State University - Department of Finance

Date Written: July 31, 2024

Abstract

We investigate the technical and ethical standardization of artificial intelligence (AI) and its corporate implications around the globe. We show that AI standards not only fuel AI investments but also broader capital and R&D spending. Standardization of machine learning methods, programming languages, protocols for big data, guidelines for data interchange, and interoperability of industrial data encourage investment. Conversely, frameworks for societal and privacy considerations in AI discourage investment. AI standards have a positive ripple effect on firm value, gradually amplifying as the standards mature and their impact on firms deepens.

Keywords: Artificial Intelligence, Standard Setting, Investment, Technology Diffusion, Machine Learning, Big Data, Ethical AI, AI Safety, Privacy, AI Regulation

JEL Classification: D22, E22, O30, O32, O33, K20

Suggested Citation

Canayaz, Mehmet and Wang, Zhe, Crafting an AI Compass: The Influence of Global AI Standards on Firms (July 31, 2024). Available at SSRN: https://ssrn.com/abstract=4481608 or http://dx.doi.org/10.2139/ssrn.4481608

Mehmet Canayaz (Contact Author)

Pennsylvania State University - Smeal College of Business ( email )

University Park, PA 16802
United States

Zhe Wang

Pennsylvania State University - Department of Finance ( email )

University Park, PA 16802
United States

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