Misuse of AI is brands’ top reputational threat, new survey says
Misuse of artificial intelligence is the leading reputational risk for companies, according to a survey of more than 150 public affairs leaders. The survey’s authors say falling public trust means AI use or overuse could quickly damage confidence among customers, investors and other stakeholders.
The Reputation Risk Index says AI has repeatedly ranked as a major concern since the survey began in April 2025, but this edition adds an urgent advisory for business leaders to act to limit long-term brand damage. Respondents cited potential safety and data risks, fraud, privacy concerns, workforce disruption and legal claims. Risks involving harm to children and sensitive personal information also ranked highly, while concerns linked to the US-Israel war on Iran had eased from the previous edition’s top tier.
- AI misuse tops companies’ reputational risks.
- Survey authors urge businesses to act quickly.
- War-related concerns have eased in the rankings.
New here? Start with this
Artificial intelligence has become increasingly common in business, but many companies worry about the consequences of how they use it. When AI is misused or overused, it can damage public trust in a company. This matters because customers, investors and other stakeholders make decisions based on whether they trust an organisation.
Companies face multiple specific risks from AI systems. They worry about threats to data safety and privacy, the possibility of fraud, how AI might replace workers, and whether it could harm vulnerable groups such as children. Legal claims and costly disputes over AI failures also concern business leaders.
Business leaders keep track of what threatens their companies' reputations because a damaged image can harm long-term prospects. The concerns that worry companies change as technology and society evolve. Identifying which risks are becoming more pressing helps explain why so many businesses now view AI as their most serious challenge.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Public concern about AI misuse is well-founded. Real risks around privacy, algorithmic bias, and labour disruption are materialising as the technology embeds rapidly in corporate operations. Companies face swift reputational damage when AI failures occur, making it prudent to treat this as a top priority alongside demonstrating transparency and safeguards to anxious stakeholders.
The case against
Whilst AI risks merit serious attention, this finding may conflate real concerns with speculative anxiety. Companies have suffered measurable, severe reputational harm from governance failures, poor labour practices, and environmental mismanagement—documented problems with clear evidence of investor and consumer backlash. AI misuse remains largely prospective compared to these established reputation damagers, suggesting companies should balance this concern with other proven priorities.