ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.

B student,
K.L.E. Law College, Bengaluru-91.

Title: Artificial Intelligence in Business

Abstract

This research paper discusses the transformative impact of artificial intelligence (AI) on various
industries and its role in driving the Fourth Industrial Revolution or Industry 4.0. It emphasizes
the exponential growth of AI, highlighting factors such as advancements in computer technology,
open-source software, and the use of technologies like cloud computing, IoT, big data, and
blockchain. The paper employs Neo-Schumpeterian Economics to analyze the impact of AI on
businesses, focusing on innovation, knowledge, and entrepreneurship as driving forces. The
literature review traces the evolution of AI from rule-based systems to sophisticated machine
learning algorithms. It explores the benefits of AI in business operations, decision-making, and
various sectors such as healthcare, finance, and automotive. The challenges and risks associated
with AI adoption, including job displacement, ethical considerations, and biases in algorithms, are
also addressed. The paper delves into AI's technical roles in different fields, citing examples such
as its impact on operations, decision-making, and challenges in adoption. Ethical considerations
related to AI, including bias, transparency, and long-term societal impact, are discussed. The
passage also outlines legal regulations governing AI utilization in India, citing examples of laws
applicable to online payment, automobile, and software and service businesses. International
perspectives on AI governance from organizations like the OECD and the UN are mentioned, along
with case-law examples. The passage concludes by emphasizing the importance of a thoughtful
and responsible approach to AI adoption, considering transparency, fairness, privacy, and
accountability to maximize benefits while mitigating potential risks.

Keywords: Artificial intelligence – Ethical - Personal Data Protection Bill, 2019 - Information

Technology Act, 2000 - Indian Patient Act,1970 - Motor vehicle Act, 1988.

1. Introduction:

Innovation has always been the main engine of an improved standard of living throughout
history. However, the process of innovation can be highly disruptive as it makes conventional
technologies obsolete. Cloud computing, Internet of things (IoT), big data, data science, artificial

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

intelligence (AI), and blockchain are the rising technologies that may create winners as well as
losers across the world. Some of these technologies are at least two and a half decades old but were
neither in the mainstream nor viable for commercial applications1. However, in the last few years,
the situation has changed dramatically, today, almost every field employs one or more of these
technologies. There are many factors responsible for this, including advancements in computer
technology (high-performance computing, grid, and cloud computing), increase in transparency
through code sharing (services like GitHub, GitLab, BitBucket) and a large number of open-source
software. At present, the enormous uses of these technologies in every field including healthcare,
automobiles, finance, gaming, environmental monitoring, agriculture, sports, energy management,
security, etc are changing the way, human beings, live, work and amuse themselves. Further
advancement of these technologies can contribute to develop hyper-automation and hyper-
connectivity, which would bring us to the dawn of the Fourth Industrial Revolution or Industry
4.0. Primarily, the advancement in AI is the heart of the enhanced performance of all other
technologies and the evolution of Industry 4.0. There are sufficient pieces of evidence available in
the literature that proves that the AI technology offers new opportunities that can lead to notable
transformation in businesses and the overall economic system2. At the business level, some of the
benefits of AI are: the quick unveiling of patterns in big data, speedy visualization and analytics,
improved product design, delivering meticulous insights, and many more. These benefits are
expected to introduce new levels of service, increased profit, expansion of businesses, improved
efficiency and cost structures. In this paper, the new growth economics, Neo-Schumpeterian
Economics, is used as a base model to analyze the impact of AI in business. The three forces which
drive the Neo-Schumpeterian Economics are innovation, knowledge, and entrepreneurship. In
particular, the paper uses these forces as a foundation to explore the success of AI algorithms,
investigate their deployment commercially, and investigate investors, the entrepreneurial actions,
and thus the global market. 3The inferences obtained from the research will provide a better
understanding of the impact of AI on businesses and society in general. It will also provide a better
understanding of how AI can transform and with which equipment human can dominate over the

1
Marston, Sean, et al. (2011) “Cloud computing—The business perspective.” Decision support systems 51(1): 176-
189.
2
Schwab, Klaus. (2017) "The Fourth Industrial Revolution, Crown Business." New York.
3
Artificial Intelligence in Business: From Research and Innovation to Market Deployment (2020), Neha Soni et al.
Elsevier journal / Procedia Computer Science 167, 2200–2210.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

AI and the modern technologies. But by drawing stringent laws and by its effective enforcement
Artificial intelligence legacy can be kept in control to not interfere in personal matters and mass
unemployment. The results obtained can aid the countries to get prepare for the adoption of AI in
near future.

2. Literature Review:

2.1 The Evolution of Artificial Intelligence in Business

Historically, AI has evolved from rule-based systems to sophisticated machine learning algorithms.
During the 1960s and 1970s, AI research primarily centered around symbolic AI. Researchers
developed knowledge representation languages and expert systems, aiming to encode human
expertise into computer programs. The roots of AI can be traced back to the mid-20th century. In
1950, Alan Turing proposed the Turing Test, a benchmark for determining a machine's ability to
exhibit human-like intelligence. The term "Artificial Intelligence" was coined by John McCarthy
in 1956, marking the birth of the field as an academic discipline. However, these early systems
faced limitations in handling uncertainty and lacked the ability to learn from data. The business
sector has witnessed the integration of AI in various applications, such as customer service, supply
chain management, and financial analysis4.

2.2 Benefits of AI in Business

The incorporation of AI technologies in business operations offers numerous advantages.

Improved efficiency, cost reduction, enhanced customer experiences, and data-driven decision-
making are among the key benefits associated with AI adoption5.

2.2.1 Automation of Repetitive Tasks:

AI systems can automate routine and mundane tasks, allowing employees to focus on more
complex and strategic activities. This not only reduces the risk of errors but also increases overall
operational efficiency.

4
The History of Artificial Intelligence (2017), Rockwell Anyoha, Harvard University.
https://sitn.hms.harvard.edu/flash/2017/history-artificial-intelligence.
5
Artificial Intelligence in Business: From Research and Innovation to Market Deployment (2020), Neha Soni et al.
Elsevier journal / Procedia Computer Science 167, 2200–2210.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

2.2.2 24/7 Operations:

AI systems, unlike human workers, can operate 24/7 without the need for breaks or shifts, ensuring
continuous productivity.

Example:

In recent incidents Infosys empire founder Sri Narayan Moorthy has mentioned that youngsters in
India should work for 70 hours a week is an easy task to achieve to increase the efficiency and
productivity in India Industries as well as companies6.

2.2.3 Predictive Analytics:

AI can analyze customer behavior and preferences to predict future trends, enabling businesses to
offer personalized recommendations and experiences.

2.2.4 Cybersecurity:

AI algorithms can enhance cybersecurity by identifying and mitigating threats in real-time,

protecting sensitive business data. AI-powered systems can detect unusual patterns and behaviors,
helping in the early identification of potential fraud or security breaches.

2.2.5 Recruitment and Talent Acquisition:

AI can streamline the recruitment process by analyzing resumes, assessing candidate suitability,
and even conducting initial interviews.

2.2.6 New Product Development:

AI can inspire the creation of entirely new products and services that cater to emerging market
demands.

2.2.7 Personalized Interactions:

AI-powered chatbots and virtual assistants provide personalized interactions with customers,
addressing queries and providing assistance in real time.

6
youngsters should work for 70 hours every week said N.R. Narayana Murthy (2023), Divyanshi Sharma, India
Today, New Delhi.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

2.2.8 Faster Data Analysis:

AI algorithms can process and analyze vast amounts of data at speeds far beyond human
capabilities. This enables quicker decision-making and more efficient use of resources.

2.3 Challenges and Risks

While AI brings significant benefits, it also poses challenges and risks. Concerns about job
displacement, ethical considerations, data security, and bias in algorithms are critical issues that
businesses must address when implementing AI7.

2.3.1 The Rise of Machine Learning

i. The late 20th century witnessed a shift towards machine learning approaches, moving away
from rule-based systems. In the 1980s and 1990s, the field saw the emergence of algorithms
capable of learning from data.
ii. The development of neural networks and the backpropagation algorithm, along with
advancements in statistical methods, paved the way for more robust and adaptive AI
systems.
iii. Reinforcement learning, where an algorithm learns by interacting with an environment, has
gained attention in training AI to play games and control autonomous systems. Generative
models, like GANs (Generative Adversarial Networks), have been pivotal in creating
realistic synthetic data.

2.3.2 Machine Learning in Automobile Industry

i. Machine learning plays a crucial role in the development of autonomous vehicles.

Algorithms learn from vast datasets, including real-world driving scenarios, to improve the
decision-making capabilities of self-driving cars.

7
Brynjolfsson, E., & McAfee, A. (2017). "Machine, Platform, Crowd: Harnessing Our Digital Future." W. W. Norton
& Company.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

ii. With the increasing connectivity in vehicles, machine learning is employed to detect and
prevent cybersecurity threats. AI algorithms analyze network data to identify anomalies
and potential security breaches, ensuring the safety and integrity of in-vehicle systems.
iii. Machine learning is used to enhance vehicle safety by predicting potential accidents.
Advanced driver assistance systems (ADAS) leverage machine learning algorithms to
analyze real-time data from sensors and cameras, providing warnings or even taking
corrective actions to prevent collisions.
iv. Machine learning contributes to the development of advanced HMIs, allowing for natural
language processing, gesture recognition, and voice commands. This enhances the
interaction between drivers and vehicles, improving the overall driving experience8.

Table-1: Broad areas of DL, their description, successful applications, and the DL algorithms preferred for each area.

2.4 Global Market Analysis

Artificial Intelligence (AI) has become a game-changer in the realm of global market analysis for
businesses. The integration of AI technologies has revolutionized the way companies gather,
process, and interpret data, providing unprecedented insights and enhancing decision-making
processes. In a knowledge-based society, start-ups are considered the innovation and growth

8
Davenport, T. H., & Ronanki, R. (2018). "Artificial Intelligence for the Real World." Harvard Business Review.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

drivers of the economy their analysis would help to gain valuable insights into the exploration of
the transformational impact of AI on businesses. The algorithm identifies the top AI start-ups by
evaluating the factors like profile, mosaic score, financing history, investor quality, business
model, funding history, etc9. AI provides businesses with the capability for continuous monitoring
of market conditions. Real-time analysis enables quick adaptation to changes, ensuring that
businesses remain agile and responsive to evolving market trends. This adaptability is crucial in a
global market where conditions can change rapidly.

3. AI’s Technical Rolls in versatile fields:

3.1 AI's Impact on Operations

AI applications in business operations, such as robotic process automation (RPA) and intelligent
data analysis, have streamlined processes, minimized errors, and increased efficiency. Case studies
of successful AI implementation in companies across various sectors will be examined.

3.1.1 Automation and Streamlining:

One of the primary impacts of AI on business operations is the automation of routine and repetitive
tasks. AI-powered robotic process automation (RPA) enables the handling of mundane and rule-
based activities, freeing up human resources to focus on more complex and strategic aspects of the
business. This results in increased operational efficiency and a reduction in errors.

3.1.2 Supply Chain Management:

AI is playing a pivotal role in optimizing supply chain operations. Predictive analytics and machine
learning algorithms analyze historical data to forecast demand, manage inventory, and optimize
logistics. This enables businesses to streamline their supply chain processes, reduce costs, and
respond more effectively to changing market conditions.

3.1.3 Customer Service and Engagement:

AI-driven chatbots and virtual assistants have transformed customer service operations. These
intelligent systems can handle routine customer queries, provide instant responses, and even

9
CB Insights. Mosaic Algorithm. https://www.cbinsights.com/company-mosaic. Accessed on 11th October 2017.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

personalize interactions based on customer data. This not only enhances the customer experience
but also allows businesses to provide round-the-clock support.

3.1.4 Human Resources and Recruitment:

AI is transforming the hiring process by automating aspects of recruitment. Intelligent algorithms

can analyze resumes, assess candidate suitability, and even conduct initial interviews. This
accelerates the hiring process, reduces bias, and ensures a more efficient allocation of human
resources within the HR department.

3.1.5 Operational Insights through IoT:

The Internet of Things (IoT) combined with AI provides businesses with real-time insights into
their operations. Sensors and connected devices collect data, and AI algorithms analyze this
information to provide actionable insights. This is particularly beneficial in industries such as
manufacturing, where real-time monitoring improves operational efficiency10.

3.2 AI's Role in Decision-Making

The ability of AI to analyze vast datasets and extract meaningful insights has transformed decision-
making processes. Businesses leveraging AI-driven analytics experience improved accuracy in
forecasting, risk management, and strategic planning.

3.3 Challenges of AI Adoption

Despite the numerous benefits, the adoption of AI in business is not without challenges. Workforce
adaptation, concerns about job displacement, and the ethical implications of AI algorithms are
areas that businesses must navigate carefully. Striking a balance between human and AI
collaboration is essential to address these challenges effectively.

10
Park, Sang-Chul. (2017) "The Fourth Industrial Revolution and implications for innovative cluster policies." AI &
Society 33(3): 433-445.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
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4. Ethical Considerations:

The ethical implications of AI in business demand careful examination. As AI continues to evolve,

ethical considerations have gained prominence. Issues related to bias in algorithms, transparency,
and the societal impact of AI applications are subjects of ongoing debate and raise important
questions about the responsible use of AI technologies.

4.1 Practical Applications and Industry Adoption

In recent years, AI has transitioned from theoretical concepts to practical applications across
various industries. Businesses leverage AI for tasks such as predictive analytics, automation, and
personalized recommendations. Natural language processing has enabled advancements in virtual
assistants and chatbots, transforming user interactions11.

4.2 Bias and Fairness:

AI algorithms can inadvertently perpetuate or even amplify biases present in training data. If
historical data used to train AI models contains biases, the system may generate biased results,
potentially leading to discriminatory outcomes. Ensuring fairness in AI algorithms is a crucial
ethical consideration, as biased decision-making can have far-reaching consequences on
individuals and communities.

4.3 Transparency and Explainability:

Many AI models operate as complex "black boxes," making it challenging to understand how they
arrive at specific decisions. Lack of transparency and explainability in AI systems can erode trust
among stakeholders. Ethical AI practices emphasize the need for businesses to adopt transparent
AI models, enabling users to understand the reasoning behind AI-generated outcomes.

4.4 Long-term Social and Economic Impact:

The widespread adoption of AI in business can have broader social and economic implications.
Ethical considerations involve assessing how AI contributes to societal well-being, addressing

11
Freddi, Daniela. (2018) "Digitalisation and employment in manufacturing." AI & Society 33(3): 393-403.

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K.L.E. Law College, Bengaluru-91.

potential inequalities, and ensuring that the benefits of AI are distributed equitably. Businesses
should engage in ethical foresight to anticipate and address the long-term impact of AI on society12.

4.5 Environmental Impact:

The computational demands of AI, especially deep learning models, contribute to significant
energy consumption. Ethical considerations include businesses assessing and mitigating the
environmental impact of AI technologies, seeking sustainable practices, and exploring energy-
efficient alternatives.

5. Legal curbs for AI Utilization

Carrying out business is not indigenous to India and its market, after LPG (Liberalization,
privatization and Globalization) implementation world markets were opened to all kinds of
Business from its vicinity. The growth of Information technology and computer science inventions
leading the Earth’s Revolution per year 10 times faster towards the future. The world's very future
will be based on xenobiotics and AI collaboration to provide the synthetic intelligence a physical
form to live among the human race13. If such a situation going to arise to take control over such an
ultimate weapon and also to safeguard ourselves from any chaotic situations, they need to be
regulated and put under control by creating stringent and flawless laws. In India AI AI-based
disputes are still in the budding stage but in Western nations, judgments were already adjourned.

5.1 Indian Laws Regulating AI:

5.1.1 Personal Data Protection Bill, 2019 in Online Payment Sector Businesses

Example: Razorpay is an Indian financial technology company that provides online payment
solutions to businesses. Founded in 2014 by Harshil Mathur and Shashank Kumar, Razorpay has
emerged as a leading payment gateway in India, offering a range of services to facilitate digital

12
Jain, Ankit, Armando Fandango, and Amita Kapoor. (2018) “TensorFlow Machine Learning Projects: Build 13 real-
world projects with advanced numerical computations using the Python ecosystem.” Packt Publishing Ltd.
13
Karpathy A, et al. (2014) “Large-scale video classification with convolutional neural networks.” Proceedings of the
IEEE conference on Computer Vision and Pattern Recognition. pp 1725-1732.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

transactions for businesses of all sizes. This fintech company’s headquarters is located in
Bangalore, India14.

5.1.1.1. Consent and Purpose Limitation (Sections 3 & 5):

Clear Consent: Emphasizes obtaining clear and specific consent from individuals before
processing personal data.

Informed Purpose: Online payment businesses using AI must inform users about the purposes
of data processing, with any deviation requiring fresh consent.

5.1.1.2. Data Minimization and Storage Limitation (Sections 4 & 6):

Necessary Data Collection: Encourages businesses to collect only necessary data for the
intended purpose.

Mechanisms for Minimization: Online payment platforms must implement mechanisms to

minimize data collection and adhere to specified storage limitation principles.

5.1.1.3. Security Safeguards (Section 28):

Mandatory Security Measures: Mandates robust security safeguards for online payment
businesses using AI, especially for financial data in transactions.

5.1.1.4. Accountability and Data Protection Impact Assessment (Sections 8 & 29):

DPIA Requirement: Introduces Data Protection Impact Assessment (DPIA) for businesses
deploying AI in online payments.

Risk Mitigation: Online payment platforms must conduct DPIAs to assess AI system impact
on user privacy and take measures to mitigate identified risks.

5.1.1.5. Cross-Border Data Transfer (Sections 34-36):

Adherence to Provisions: Mandates adherence to provisions on cross-border data transfer for

online payment businesses using AI.

14
https://en.wikipedia.org/wiki/Razorpay.

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Safeguards: Requires adequate safeguards, ensuring destination country data protection

standards are at par with or higher than India's.

5.1.1.6. Artificial Intelligence and Profiling (Section 38):

Transparency Requirement: Recognizes AI's impact on automated decision-making, requiring

transparency for online payment businesses using AI algorithms.

Disclosure: Businesses must be transparent about the logic, significance, and consequences of
AI algorithms in credit scoring, risk assessment, or personalized services.

5.1.1.7. Data Localization (Section 40):

Government Power: While not mandating complete data localization, grants the government
power to prescribe categories of personal data processed exclusively in India.

Business Awareness: Online payment businesses using AI should be mindful of potential data
localization requirements.

5.1.1.8. Consent Withdrawal and Right to be Forgotten (Sections 7 & 20):

Withdrawal Mechanism: Individuals have the right to withdraw consent, necessitating online
payment businesses using AI to provide mechanisms for users to exercise this right.

Erasure Challenges: Individuals can request the erasure of personal data, posing challenges for
businesses using AI algorithms for long-term analysis in online payments15.

5.1.2. Specific Regulations on AI-powered Automobile Business

Example: Tata Technologies Limited is an Indian multinational product engineering company

that provides services in engineering and design, product lifecycle management, manufacturing,
product development, and IT service management to automotive and aerospace original equipment
manufacturers as well as industrial machinery companies. Tata Technologies headquarters located
in Pune, India16.

15
Personal Data Protection Bill, 2019.
16
https://www.tatatechnologies.com.

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 ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
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5.1.2.1 Personal Data Processing:

“The Information Technology Act, 2000” and its subsequent amendments address data protection.
Companies utilizing AI in automobiles need to comply with data protection provisions to ensure
the lawful processing of personal data collected by AI systems17.

5.1.2.2 Software Protection:

AI technologies often involve complex software. Copyright laws can protect the source code and
ensure that the expression of the AI algorithms is safeguarded against unauthorized use or
reproduction.

5.1.2.3 Confidential Information:

Businesses may rely on trade secret protection to keep certain aspects of their AI technologies
confidential. This could include proprietary algorithms, datasets, or other information that provides
a competitive advantage.

5.1.2.4 Responsibility for AI Actions:

The Act doesn't explicitly address liability for AI systems, but as AI becomes more prevalent in
automobiles, legal frameworks may evolve to assign responsibility in case of accidents or
malfunctions.

5.1.2.5 Standards and Certification:

BIS sets standards for various products, and adherence to these standards may be required for AI
technologies in automobiles to ensure safety, interoperability, and quality.

5.1.2.6 Regulation of Autonomous Vehicles:

“The Motor Vehicles Act, 1988” governs road transport vehicles in India. As AI technologies
enable autonomous vehicles, amendments to this act or separate regulations may be necessary to
address issues related to autonomous driving18.

17
Information Technology Act, 2000.
18
The Motor Vehicles Act, 1988.

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5.1.3. AI Regulating Laws in Software & Service Business

Example: Zoho Corporation is an Indian multinational technology company that makes

computer software and web-based business tools. It is best known for its online office suite offering
Zoho Office Suite. The company was founded in 1996 by Sridhar Vembu and Tony Thomas and
has a presence in seven locations with global headquarters in Chennai, Tamil Nadu, India, and
corporate headquarters outside of Austin in Del Valle, Texas19.

5.1.3.1 Data Processing Principles (Section 4):

Companies using AI in software and services must align data processing activities with principles
such as explicit consent, purpose limitation, data minimization, and accountability.

5.1.3.2 Sensitive Personal Data (Section 3(36)):

Businesses leveraging AI in software & services dealing with sensitive data must adhere to
heightened protection standards20.

5.1.3.3 Indian Patent Act, 1970:

Companies developing innovative AI algorithms in software can seek patent protection21.

5.1.3.4 Trade Secrets:

Indian Contract Act, 1872 protects trade secrets as confidential information including the
protection of proprietary AI algorithms through trade secrets is crucial for maintaining a
competitive edge22.

5.1.3.5 Data Security and Privacy (Section 43A):

Companies using AI in software & services must implement robust security measures to safeguard
user data.

19
https://www.zohocorp.com.
20
Information Technology Act, 2000.
21
Indian Patent Act, 1970.
22
Indian Contract Act, 1872.

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5.1.3.6 Electronic Contracts and Signatures (Section 10A):

Information Technology Act, 2000 AI applications may involve automated decision-making in

electronic transactions, requiring compliance with legal standards23.

5.1.4. Right to Privacy Case-law

Justice K.S. Puttaswamy (Retd.) v. Union of India24

Facts: The case began with the question of whether the right to privacy was a fundamental right,
which was raised in 2015 in the arguments concerning the legal validity of the Aadhaar database.
The Attorney General appearing for the State argued that the existence of the right to privacy as a
fundamental right was in doubt.

Decision: The nine Judge Bench in this case unanimously reaffirmed the right to privacy as a
fundamental right under the Constitution of India. The Court held that the right to privacy was
integral to freedoms guaranteed across fundamental rights, and was an intrinsic aspect of dignity,
autonomy and liberty. The Bench unanimously held that “the right to privacy is protected as an
intrinsic part of the right to life and personal liberty under Article 21 and as a part of the freedoms
guaranteed by Part III of the Constitution”. In doing so, it overruled previous judgments of the
Supreme Court in M.P. Sharma and Kharak Singh, insofar as the latter held that the right to privacy
was not recognised under the Indian Constitution.

5.1.5. NITI Aayog's AI Policy:

NITI Aayog, the policy think tank of the Indian government, has been actively working on the
National AI Strategy. While not a legal document, this policy framework aims to guide the
responsible and ethical use of AI in various sectors, emphasizing transparency, accountability, and
societal impact25.

23
Information Technology Act, 2000.
24
(2018) 1 Supreme Court Case 809.
25
https://www.niti.gov.in.

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5.2. International Organizations:

Organizations like the Organization for Economic Co-operation and Development (OECD) and
the United Nations (UN) have been actively involved in shaping international discussions on AI
governance. The OECD's AI Principles provide a framework for responsible AI development, and
the UN has held forums and discussions on the ethical use of AI26.

5.2.1 Partnership on AI:

Partnership on AI (PAI), a consortium of companies and organizations, focuses on ensuring that

AI technologies are developed and used in a manner that aligns with human values27.

5.2.2 Data Protection Laws:

Data protection regulations, such as the General Data Protection Regulation (GDPR) in the EU,
have a significant impact on AI applications, particularly in the context of handling personal data.
GDPR places specific requirements on the processing of personal data and includes provisions
relevant to AI technologies28.

5.2.3 International Cases:

i. Big Brother Watch v. United Kingdom29

Court: European Court of Human Rights (Grand Chamber)

Facts: Electronic surveillance programmes operated by the intelligence services of the United
States of America and the United Kingdom in 2013, intercepted sixteen applicant’s electronic
communication through a software AI-powered with machine learning capacity. Case filed for
violating of their fundamental human rights against the parent and child Acts.

Argument: The court ruled that the storage of personal information by the State amounted to
a serious interference with an individual’s rights. This was especially so when the data were
subject to automated processing power and machine learning advanced rapidly, the storage and

26
https://www.un.org.
27
Davenport, T. H., & Ronanki, R. (2018). "Artificial Intelligence for the Real World." Harvard Business Review.
28
World Economic Forum. (2020). "The Future of Jobs Report 2020." Retrieved from
https://www.weforum.org/reports/the-future-of-jobs-report-2020.
29
(2022) 74 E.H.R.R. 17.

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electronic processing of data could by itself be highly intrusive, without any underlying content
or related communications data being viewed by an individual.

Decision: The present case failed to comply with the ICCPR and the International Principles
on the Application of Human Rights to Communications Surveillance since the United
Kingdom had not demonstrated that such surveillance was strictly necessary or proportionate.
They further contended that surveillance programmes should not be considered independently
but should instead be viewed in relation to the entirety of a nation’s surveillance activities as
machine learning, through which mathematical algorithms could draw inferences from
collections of data, had increased the invasiveness of big data sets and data mining. So found
that the action of the state violated the Articles and other statutes that conferred security to their
citizens.

ii. Clearview AI Inc. v. The Information Commissioner30

Court: First-tier Tribunal General Regulatory Chamber

Facts: CV is incorporated in Delaware, in the United States of America and does not have and did
not have an establishment in the EU or UK as defined in the legislation. CV’s principal place of
business is New York City, but it operates remotely using a third-party computing platform to host
its servers. CV has clients in the United States of America and in other countries around the world
where e-Service is no longer offered by CV to commercial clients but prior to 2020 commercial
clients were using the Service. This ceased as a result of the terms of a settlement agreed between
CV and the American Civil Liberties Union. The Database contains facial images in photographs
which CV has copied/scraped from the public internet. . Scrapers can be designed to evade privacy
controls, such as those that protect some types of private social media accounts but scrapers used
by CV are not programmed to do this. So, if a page is password protected, CV’s scrapers will not
be able to access that page. Due to such unsafe situation and receiving of multiple complaints from
the public who were clients in the past the information commissioner took action. But CV
challenged the authority and the jurisdiction of the commissioner in UK court for his action against
them.

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Decision: The court concluded that the Information Commissioner did not have jurisdiction to
issue the Enforcement Notice because the processing is beyond the material scope of the GDPR
and is not relevant processing for the purposes of the United Kingdom. The notices against which
the appeal was brought were not in accordance with the law. Thus, the appeal was allowed.

6. Conclusion:

The integration of Artificial Intelligence in business is reshaping the landscape, offering

unprecedented opportunities for growth and efficiency. However, businesses must navigate
challenges related to ethics, data security, and workforce adaptation. 31Businesses must prioritize
transparency, fairness, privacy, and accountability to ensure that AI technologies contribute
positively to society while minimizing potential risks and harm. A thoughtful and responsible
approach to AI adoption is essential to maximize its benefits and mitigate potential risks. As AI
technologies continue to evolve, businesses that leverage these tools for market analysis will gain
a competitive advantage, driving innovation, efficiency, and sustainable growth in the dynamic
and ever-changing global marketplace. However, organizations must also navigate challenges such
as ethical considerations, workforce adaptation, and the responsible deployment of AI to ensure
sustainable and beneficial integration. The compared international and other countries' law giving
an outline and framework to sort the problems arising due to AI usage among the non-digital
manual lifestyle32.

31
Russell, S., & Norvig, P. (2018). "Artificial Intelligence: A Modern Approach." Pearson.
32
Zeng, Y., Chen, H., & Yang, T. (2019). "Artificial Intelligence and Business: A Multidisciplinary Perspective."
Information Systems Frontiers.

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ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

7. References:

1. Brynjolfsson, E., & McAfee, A. (2017). "Machine, Platform, Crowd: Harnessing Our
Digital Future." W. W. Norton & Company.

2. Davenport, T. H., & Ronanki, R. (2018). "Artificial Intelligence for the Real World."
Harvard Business Review.

3. Russell, S., & Norvig, P. (2018). "Artificial Intelligence: A Modern Approach." Pearson.

4. World Economic Forum. (2020). "The Future of Jobs Report 2020." Retrieved from
https://www.weforum.org/reports/the-future-of-jobs-report-2020

5. Zeng, Y., Chen, H., & Yang, T. (2019). "Artificial Intelligence and Business: A
Multidisciplinary Perspective." Information Systems Frontiers.

6. Marston, Sean, et al. (2011) “Cloud computing—The business perspective.” Decision

support systems 51(1): 176-189.

7. Schwab, Klaus. (2017) "The Fourth Industrial Revolution, Crown Business." New York.

8. Artificial Intelligence in Business: From Research and Innovation to Market Deployment

(2020), Neha Soni et al. Elsevier journal / Procedia Computer Science 167, 2200–2210.

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ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

9. The History of Artificial Intelligence (2017), Rockwell Anyoha, Harvard University.

https://sitn.hms.harvard.edu/flash/2017/history-artificial-intelligence.

10. Youngsters should work for 70 hours every week said N.R. Narayana Murthy (2023),
Divyanshi Sharma, India Today, New Delhi.

11. CB Insights. Mosaic Algorithm. https://www.cbinsights.com/company-mosaic. Accessed

on 11th October 2017.

12. Park, Sang-Chul. (2017) "The Fourth Industrial Revolution and implications for innovative
cluster policies." AI & Society 33(3): 433-445.

13. Freddi, Daniela. (2018) "Digitalisation and employment in manufacturing." AI & Society
33(3): 393-403.

14. Jain, Ankit, Armando Fandango, and Amita Kapoor. (2018) “TensorFlow Machine
Learning Projects: Build 13 real-world projects with advanced numerical computations
using the Python ecosystem.” Packt Publishing Ltd.

15. Karpathy A, et al. (2014) “Large-scale video classification with convolutional neural
networks.” Proceedings of the IEEE conference on Computer Vision and Pattern
Recognition. pp 1725-1732.

16. https://en.wikipedia.org/wiki/Razorpay.

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ARTIFICIAL INTELLIGENCE IN BUSINESS (2023), M.P. Surya Vallavan, 03FL23BLL109, 1st year LL.B student,
K.L.E. Law College, Bengaluru-91.

17. Personal Data Protection Bill, 2019.

18. https://www.tatatechnologies.com.

19. The Motor Vehicles Act, 1988.

20. https://www.zohocorp.com.

21. Information Technology Act, 2000.

22. Indian Patent Act, 1970.

23. Indian Contract Act, 1872.

24. (2018) 1 Supreme Court Case 809.

25. https://www.niti.gov.in.

26. https://www.un.org.

27. (2022) 74 E.H.R.R. 17.

28. [2023] UKFTT 00819 (GRC)

29. Russell, S., & Norvig, P. (2018). "Artificial Intelligence: A Modern Approach." Pearson.

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