Spillover Effects in the Age of Generative AI

The rapid development of generative artificial intelligence (GenAI) has marked a significant shift in how organisations operate and innovate. While GenAI offers new opportunities, it has also created new risks that can escalate into crises. Importantly, these crises are not always limited to the organisation where they originate but can spill over to other organisations in the same sector, leading to broader reputational consequences. 

Professor Daniel Laufer, from our PRINZ tertiary partner AUT and Professor Yijing Wang investigate such spillover crises in the age of GenAI. They build on their own crisis spillover model and extend it to GenAI-related contexts. They outline five cases that highlight how reputational damage can extend beyond a single firm, affecting others in the industry. They also propose a strategic framework to help organisations identify the risk of spillover crises, and offer prescriptive guidance for avoiding, mitigating, or responding to spillover crises when they occur.

To read the study, click here