Adoption of Artificial Intelligence in Corporate Finance: Addressing Bias and Ethical Considerations

Abstract

The integration of Artificial Intelligence (AI) into corporate finance has brought transformative changes in decision making process, managing risks, and improving operational efficiency. Many tasks which were earlier driven by human intervention were automated using machine learning, natural language processing and other AI tools. The widespread integration, though intended to reduce human biases and bring greater fairness to decisions, is not without limitations. AI driven finance poses certain inherent risks resulting from biases in decision making that must be carefully addressed to effectively utilize AI tools and sustain it during complex decision making and risk management situations. The chapter is recommended for corporate finance professionals and researchers in the field to enhance awareness and contribute to the growing risk mitigation strategies in AI driven finance.