National Level Essay Competition on AI and Cyber Laws

IMPACT OF ARTIFICIAL INTELLIGENCE ON ORGANIZATIONS

Author: Dev Shroff (Gujarat National Law University)

Submitted to: Centre for Research Development and Training in Cyber Laws
I. ABSTRACT

AI is the science and engineering of making smart machines, it is a fast growing and in demand
technology that is changing the way organizations operate. AI is seen by many as an engine of
productivity and economic growth. Even as we speak, artificial intelligence (AI) AI is already
having an impact on our world in many different ways. AI has been playing an increasingly
important role in our lives and economy, be it in data collection to maximize profits or to
improve the way all the resources within in business are utilized. Worldwide competition to reap
AI’s benefits is fierce, and global leaders, with the USA and some Asia countries having actively
emerged on the scene.

This paper analyses the dependence of organizations on AI, how important AI will be in the
upcoming decades, how it is playing an important role in helping companies improve and change
from the typical brick and mortar structure of operation and adapt to dynamic global scenarios to
flourish, the way AI can replace and save human workforce and increase efficiency in
organizations managemental work. This article answers an important question, that is, Will AI
replace Human Intelligence? It also elucidates upon AI’s role in the Indian judiciary and its
active participation in decreasing the burden of pending cases on the judiciary. AI is not expected
to be replacing humans in the spheres requiring human cognitive ability, however, it is expected
to replace a significant percent of time-consuming opportunities of functional level management
work in organizations. This article includes lucid pictures, statistics and diagrams to help better
understanding of Artificial Intelligence to the reader.

Key words:

1) Artificial Intelligence
2) Augmentation and Automation
3) Businesses and Organizations
4) Countries and Companies
5) Legal Industry

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II. INTRODUCTION

Artificial intelligence (AI) is a term used to describe machines performing human-like cognitive
processes such as learning, understanding, reasoning, and interacting. It can take many forms,
including technical infrastructure (i.e., algorithms), a part of a (production) process, or an end-
user product. AI looks increasingly likely to deeply transform how modern societies live and
work. Already today, smartphone smart assistants, such as Siri, perform a variety of tasks for
users; furthermore, all Tesla cars are connected and things that any one of them learns are shared
across the entire fleet. AI also matches prices and cars when one orders an Uber ride, and curates
what social media offer to a user based on their past behavior. With the rise of AI comes the
important question of how much it will affect businesses, consumers, and the economy in more
general terms. Employees are increasingly interested in knowing what AI means for their job and
income, while businesses are also keen to find ways in which they can capitalize on the
opportunities presented by this powerful phenomenon. Artificial intelligence (AI) is a branch of
computer science. AI technologies aim to reproduce or surpass abilities in computational systems
that are generally deemed intelligent if performed by a human. These abilities include: learning,
reasoning, pattern-recognition, problem-solving, visual perception and language-understanding

It is the science and engineering of making intelligent machines, especially intelligent computer
programs. It is related to the similar task of using computers to understand human intelligence,
but AI does not have to confine itself to methods that are biologically observable 1.
Artificial Intelligence is a field that combines databases and computer science to enable problem-
solving. Machine Learning and Deep Learning encompassed under the AI algorithm could be
used to make expert systems that can make predictions or classifications based on data. The two
types of AI are;

1) Weak AI - It is also called Narrow AI, and is used to perform specific tasks. It consists of
most of the AI around us today, for example, Apple’s Siri, Amazon's Alexa.

2) Strong AI - Where machines have intelligence equal to humans, it would be a machine that is
self-aware and conscious with the ability to solve problems, learn and predict the future.

Deep Learning and Machine Learning are subfields of Artificial Intelligence, and deep learning
is infact a subfield of machine learning. The way in which the subfields of AI differ is how each
algorithm works, Deep learning automates much of the process eliminating human interference.
Whereas, machine learning is more dependent on human interference to work and learn.

1
John McCarthy (2004). What is Artificial Intelligence?
https://borghese.di.unimi.it/Teaching/AdvancedIntelligentSystems/Old/IntelligentSystems_2008_2009/Old/
IntelligentSystems_2005_2006/Documents/Symbolic/04_McCarthy_whatisai.pdf

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III. LITERATURE REVIEW

AI is a breakthrough in the sphere of management in organizations. The McKinsey Global

Artificial Intelligence Survey indicates the importance of AI as a value creation tool. It shows
that there has not been a significant rise in the use of AI, however, companies are beginning to
use AI for managerial work at functional level which are the primary time-consuming tasks for
managers.
According to American Bar Associations Report of 2020, only 7% of the respondents reported
that their firms use AI tech tools. Meanwhile, 23% of the respondents were not interested in
purchasing AI-based tools and 34% didn’t possess enough knowledge to answer regarding their
plans to use AI in their firms. A report by Deliotte says 39% of the time-consuming tasks in legal
profession can be automated. The National Judicial Data Grid shows the number of cases
pending in the Indian Judiciary which can possibly be decreased significantly with the use of AI.

The McKinsey Global Institute (MGI) recently analyzed economic data from the United Nations,
the World Bank, and the World Economic Forum and reported that by 2030, AI has the potential
to add 16% — or about $13 trillion — to the global economy. It could also boost the global gross
domestic product (GDP) by up to 26%. McKinsey also reports that by the same year, at least
70% of companies are likely to have adopted at least one form of AI technology — perhaps
computer vision, advanced machine learning, natural language, robotic process automation, or
virtual assistants. It is a trusted Institute and the article on its website are comprehensive and
easily understandable.

Northern Island Business Information has said this-Research suggests that AI doesn't always
perform best on its own. AI technologies are great at driving or even replacing the lower-level,
repetitive tasks, but businesses often achieve the greatest performance improvements when
humans and machines work together. This website is a free service offered by Invest Northern
Ireland. It contains essential information, support and services for us and is simple to use, up to
date and practical.

The change in the structure of conducting business opens up new opportunities for organizations
to widen their reach. The percentage of businesses using and investing in AI is constantly
increasing. However, surveys also show the disadvantages of improper implementation and
execution of this extensive technology.

With the increased adaption of AI, any workers also question the risks to their jobs since AI is
replacing many jobs in AI advanced countries like Japan and China. However, research has
revealed that AI has not yet reached the level of advancement where it is capable of replacing
human labor. Thus, most businesses are opting for augmentation (humans and AI working in
collaboration) over automation (machine has complete control over decisions). Although the
potential for AI is vast, with various surveys pointing towards signs that the economic growth

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due to AI will increase drastically in the next decade, helping create new profit streams, strategic
management and analysis is the only way that an organization can handle AI.

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IV. RESEARCH METHODOLOGY

In this research paper, we have followed the quantitative research methodology:

Quantitative research is the numerical representation and manipulation of observations for the
purpose of describing and explaining the phenomena that those observations reflect. It is used in
a wide variety of natural and social sciences, including physics, biology, psychology, sociology
and geology.

Moreover, Creswell (1994) has given a very concise definition of quantitative research as a type
of research that is `explaining phenomena by collecting numerical data that are analyzed using
mathematically based methods (in particular statistics).'

There are many advantages of quantitative research. Some of the major advantages of why
researchers use this method in market research are:
Collection reliable and accurate data: As data is collected, analyzed, and presented in numbers,
the results obtained will be extremely reliable. Numbers do not lie. They offer an honest picture
of the conducted research without discrepancies and is also extremely accurate. In situations
where a researcher predicts conflict, quantitative research is conducted.
Quick data collection: A quantitative research is carried out with a group of respondents who
represent a population. A survey or any other quantitative research method applied to these
respondents and the involvement of statistics, conducting, and analyzing results is quite
straightforward and less time-consuming.
Wider scope of data analysis: Due to the statistics, this research method provides a wide scope of
data collection.
Eliminate bias: This research method offers no scope for personal comments or biasing of
results. The results achieved are numerical and are thus, fair in most cases.

What we have used in this research paper

Identified the research problem -- as with any academic study, we have stated clearly and
concisely the research problem being investigated.
Review the literature -- reviewed scholarship on the topic, synthesizing key themes and, if
necessary, noting studies that have used similar methods of inquiry and analysis.
Describe the theoretical framework -- provided an outline of the theory or hypothesis
underpinning your study. Defined unfamiliar or complex terms, concepts, or ideas and provide
background information.
Interpretation of results – reiterated the research problem being investigated and compare and
contrast the findings with the research questions underlying the study.

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V. MAIN BODY

1. ORGANIZATION’S DEPENDENCE ON AI

Artificial Intelligence in business is a breakthrough that can enable good managers to be great,
the use of AI excites forward-thinking managers. The applications of AI in business are umpteen
from improving communication and relations with employees and customers to finding different
patterns in volumes of data.

a) The state of AI in 2020

The results of this year's McKinsey Global Artificial Intelligence Survey 2 indicate that
organizations use AI as a value-creation tool. Increasingly, this value is coming in the form of
returns, and companies around the world have planned to invest more in AI considering the
COVID-19 pandemic and such unexpected events in the future. According to the latest report
findings, there is no significant increase in AI adoption. Companies are beginning to capture the
value of AI in managerial management functions and employ them at the functional level -
managing the necessary business elements that are time-consuming when done using traditional
methods, for example, scheduling, organizing, paperwork, etc.

AI companies that help automate administrative management functions:

1) Hyperscience – Developed by a New York based company. This software is used to manage
monotonous back-office paperwork.

2) x.ai – Developed by a New York based company. This software artificial intelligence is a
powered personal assistant that schedules meetings.

3) Datalogue – Developed by a company located in the USA, it helps compile and provide on-
demand data which is used by E-commerce companies.

4) Init.ai – A New York based company that was acquired by Apple in 2017 enables companies
to easily create AI and natural language conversational apps and services and integrate third-
party APIs through the developer platform.

5) NopSec – Developed in Brooklyn, USA. With machine learning, their product prioritizes
cyber security risks based on the degree of vulnerability.

2
McKinsey (2020, November 17) The State of AI in 2020
https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/global-survey-the-state-of-ai-in-
2020

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 b) How has AI redefined management

Artificial Intelligence will soon be able to do the administrative tasks that consume much of
managers’ time faster, better, and at a lower cost. According to surveys 3, employees/managers
spend more than 3 hours per day on easily automated tasks. According to Harvard Business
Review4 survey of project managers, 54% of their time is found to be used in administrative
work (for example, a typical office manager has to juggle frequently in schedules employee
shifts due to staff illness/sudden departure)

Machine learning can also serve as a supportive tool in cases of judgment/discretionary action.
It’s inferred that introducing AI in the management sector would lead to a decrease in
employment opportunities, but treating machines as colleagues would be a better option for the
organization because human judgment/intelligence is unlikely to be automated by AI whereas
intelligent machines can add enormously to this type of work, supporting in decision making and
analytical simulations as well as research activities. AI will not only augment managers' work,
but it will also act as an always-available assistant and adviser, also it will enable managers to
focus more on things that only humans can do. It will ultimately prove to be cheaper, efficient,
and unbiased in its actions as compared to human beings.

AI can facilitate managers to improve team dynamics and improve team accountability by giving
them timely feedback.

3
KronosUK. (2020, March 09) Majority Workforce Management Still Done Manually
https://www.kronos.co.uk/about-us/newsroom/majority-workforce-management-still-done-manually-says-kronos-
research

4
Harvard Business Review (2016, November 02) How Artificial Intelligence Will Redefine Management
https://hbr.org/2016/11/how-artificial-intelligence-will-redefine-management

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 2. AI’S EFFECT ON THE GLOBAL MARKET

a) Market size and potential of AI

The global AI market size was valued at USD 62.35 billion in 2020. It is expected to expand at a
compound annual growth rate (CAGR) of 40.2% in the period from 2021 to 20285.

The continuous
research and innovation
sponsored or directed
by the global
technology giants are
rapidly driving the
adoption of advanced
technologies in
industry verticals, such
as automotive,
healthcare, retail,
finance, and
manufacturing. While
technology has always
been an essential
element for several of these industries, AI has brought technology to the center of organizations.
For instance, from self-driving vehicles to crucial life-saving medical gear, AI is being infused
virtually into every apparatus and program. AI is proven to be the significant revolutionary
element of the upcoming digital era. Several start-ups and mid-sized companies are focusing
their entire business on AI. Several companies are working for making AI more accessible for
enterprise use-cases.

5
https://infintec.org/artificial-intelligence-market-size-worth-997-77-billion-by-2028/#:~:text=According
%20to%20the%20latest%20report,40.2%25%20from%202021%20to%202028.

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 b) How Covid-19 has helped drive AI globally

The COVID-19 pandemic has emerged as an opportunity for AI-enabled computer systems to
fight against the epidemic. Several companies are working on preventing, mitigating, and
containing the virus.

For instance, the Chinese technology giant Alibaba’s research institute, Damo Academy has
developed a diagnostic algorithm that can detect new coronavirus cases with the chest Computed
Tomography (CT) scan. The AI model used in the system has been trained with the sample data
from over 5,000 positive coronavirus cases. In another instance, in June 2020, Lunit developed
an AI solution for x-ray analysis of
the chest for simpler management of
Covid-19 cases, and offer assistance
in interpreting, monitoring, and
patient trial.

In April 2020, Google launched an

AI-enabled chatbot, called Rapid
Response Virtual Agent for call
centers. This chatbot is built to
respond to issues customers might
be experiencing due to the COVID-
19 outbreak over voice, chat, and
other social channels.

c) Impact of AI on economic growth

Increasing productivity and trade opportunities: One of AI’s impacts on economic growth comes
through its macroeconomic effects. For instance, when AI increases productivity growth, that
productivity growth increases economic growth as well. It also increases opportunities for
international trade.

Better management of complex production units: AI helps businesses better handle complex, far-
flung production units by providing a centralized management system. For example, a business
can use AI to manage its warehouses more efficiently, predict consumer demand, and improve
the accuracy of its quick-turn around and delivery systems.

Expansion of digital platforms: Trade via digital platforms is possible because of AI. The online
auction site eBay, for example, uses AI to automate its operations.

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 d) How AI Is Helping Companies Expand Globally

Global expansion and AI have had a fruitful partnership. AI helps companies expand globally in
numerous ways:

Easy expansion through digital platforms: AI automation via digital platforms provides a
convenient way for companies to expand internationally. In the USA, 97% of small businesses
that are active on eBay, which uses AI, export some of their products. In comparison, only 4% of
offline businesses that do not use AI export their products.

Accurate translation services: AI also provides instantaneous, accurate translation services that
improve dialogue, decrease miscommunications, and make international cooperation much more
streamlined and effective. Using AI translations in business has been shown to have a positive
effect on trade revenues - an effect that’s equivalent to decreasing the distance between the
countries by over 35%.

Improving trade negotiations: AI does not only enhance communications, but it also enhances
their outcomes as well. AI can be used to analyze the economic paths of negotiating partners in
various scenarios, predict how different variables in the trade scenario will affect outcomes, and
predict trade responses from countries that are not a party to the negotiation. Brazil, for example,
has developed an Intelligent Tech + Trade Initiative that emphasizes including AI as a
component of trade negotiations.

Supply chain management: AI systems can also respond to the supply chain in real-time. They
can detect patterns and trends, and they can predict where and when demand will increase. They
can also automatically increase production to meet that demand, or they can decrease production
to respond to decreased demand, thus reducing wasted labor and surplus inventory.

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 3. IMPACT OF AI ON THE LEGAL PROFESSION

AI is beginning to transform the Legal Profession in several ways, but in most cases, it supports
enormously what humans do and frees them up to deal with higher-level tasks. The legal industry
has, slowly but surely begun embracing modern technology.

According to the American Bar Association’s (ABA) report of 2020 6, only about 7% of
respondents reported that their firms use AI tech tools. Meanwhile, 23% of the respondents were
not interested in purchasing AI-based tools and 34% didn’t possess enough knowledge to answer
regarding their plans to use AI in their firms

a) Will AI replace Human Intelligence, leaving the profession obsolete?

After the advent of AI in the legal sector, it has immensely improved the efficiency of lawyers,
trademark search software, legal analysis, legal research, contract drafting, and much more.
However, none of the AI-based technology aims to take over a lawyer’s job and all the AI-based
software or programs are increasing the efficiency and authenticity. A major part of the legal
sector contains analysis, judgment/ decision making, representation, cognitive tasks which
cannot be automated. Machine learning can replace humans only in algorithm/repetition-based
work, working alongside human cognitive ability/achieving ‘singularity’ will not be possible
until the late 2050s7. According to a report by Deloitte8, 39% of legal jobs can be automated,
however, these include time-consuming legal tasks. AI can replace up to 23% of lawyers' daily
life responsibilities9.

6
AmericanBarAssociation (2020) Tech Report 2020
https://www.americanbar.org/groups/law_practice/publications/techreport/2020/

7
Cem Dilmegani (2021, October 8) When will Singularity Happen
https://research.aimultiple.com/artificial-general-intelligence-singularity-timing/

8
Jarrod Haggerty (n.d) The Case for Disruptive Technology in the Legal Profession
https://www2.deloitte.com/uk/en/pages/financial-advisory/articles/the-case-for-disruptive-technology-in-the-legal-
profession.html

9
James Yoon (2017, March 19) AI is doing Legal Work but It won’t replace Lawyers Yet. The New York Times.
https://www.nytimes.com/2017/03/19/technology/lawyers-artificial-intelligence.html

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 b) AI’s role in Indian Judiciary

According to National Judicial Data Grid (NJDG) 10(as on October 2021) – 4,01,55,355 cases are
pending in the Indian district and subordinate courts 56,22,293 cases are pending in High Courts
and approximately 70,000 cases are pending in the Supreme Court. Former Supreme Court Judge
Justice Markandey Katju in 2019 has said that it will take about 360 years to clear the backlog
provided if no fresh case is filed.

In India, AI can help the judiciary to clear the backlog by identifying, analysis and segregating
cases, Indian judiciary has already started the application of AI in the courts for faster and easier
disposal of cases. SUPACE (Supreme Court Portal for Assistance in Courts Efficiency), is
designed to collect relevant facts and laws for the judges according to their needs; it is not
designed to take decisions on behalf of them, similarly, SUVAS (Supreme Court Vidhik
Anuvaad Software) is an AI system that can assist in the translation of judgments into regional
languages. IIT Kharagpur researches in 2020 had developed software which could tell which
laws are being violated, it would help common man profusely in taking a particular situation to
the court and also reduce redundant pendency of the judiciary.

After the advent of AI, the legal sector worldwide will have to make major changes in the laws
to adapt and deal with infringement of rights by AI machines/software.

a) Can AI infringe Copyright law? In 2013, the University of Konstanz developed ‘eDavid’, a
painting robot that can mimic painting styles of famous artists. In the above case, existing laws
whose designs were framed establishing a direct involvement of humans are already struggling
to solve the problems arising from the involvement of AI, if the particular machine does not
come under the scope of principal-agent relationship with the programmer or when the liability is
without authorship of the programmer, it is not possible to hold AI liable unless the laws confer
it with authorship duties, rights or liabilities.

To conclude, AI is a double-edged sword, though it has many advantages it comes with some
challenges which the legal industry will have to face. AI raises a lot of questions related to job
opportunities and liability in case of infringement of an individual's rights but at the same time, it
provides a new way of functioning and opportunities.

In our opinion, all the facts and justifications mentioned above indicate that AI will not take over
employment opportunities instead it will create a new platform and bring in more opportunities.
It will increase efficiency, effectiveness, and authenticity. Another positive key point to
acknowledge is the prevention of undue delay in justice delivery.

10
National Judicial Data Grid (2021, October 25) Department of Justice.
https://njdg.ecourts.gov.in/njdgnew/?p=main/pend_dashboard

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VI. CONCLUSION

“Artificial intelligence would be the ultimate version of Google. The ultimate search engine that
would understand everything on the web. It would understand exactly what you wanted, and it
would give you the right thing. We're nowhere near doing that now. However, we can get
incrementally closer to that”11

Artificial intelligence (AI) is one of the hottest topics in business right now. Yet despite this
high-profile image, it can still be challenging for individuals to precisely say what AI is, and
even harder to understand how you can thrive from it. To realize the benefits of AI, businesses
must think about how the introduction of this technology will impact every corner of its
operations, and crucially their customers experience too.

The change that AI has brought in the way organizations function is tremendous. Although the
business world has come a long way from the orthodox methods of conducting business, the
prospects of advancement are vast. Existing technologies are being upgraded for optimal
performance and new technologies are coming in with creative solutions to the new age
problems. The inclusion of AI in the field of business has both advantages and limitations.
However, most research shows that organizations are willing to invest in AI and its subsets, as it
will prove to be beneficial in the long run.

As AI tools spread throughout the organization, those closest to the action become increasingly
able to make decisions once made by those above them, flattening organizational hierarchies.
That encourages further collaboration and even bigger thinking.

The ways AI can be used to augment decision making keep expanding. New applications will
create fundamental and sometimes difficult changes in workflows, roles, and culture, which
leaders will need to shepherd their organizations through carefully. Companies that excel at
implementing AI throughout the organization will find themselves at a great advantage in a
world where humans and machines working together outperform either humans or machines
working on their own.

The truth is, there is no silver bullet on how to do AI organizational transformation. Every need
is different, and every organization is unique.

Ask yourself, is the organization built to realize the insights and wisdom that AI can bring them?

11
Larry Page (2000), interview.

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