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Perspectives

Introducing Forgepoint Forward: What’s Ahead in AI Governance

Preisha Agarwal

November 21, 2024

  • Blog Post
Introducing Forgepoint Forward: What's Ahead in AI Governance

Forgepoint Capital is excited to announce the first edition of Forgepoint Forward for Q4 2024: What’s Ahead in AI Governance.

About Forgepoint Forward

Forgepoint Forward is a quarterly series that aims to uncover emerging opportunities for innovation and investment while spotlighting the startup landscape. Created for entrepreneurs, information security leaders, and the broader information technology community, each report combines extensive primary and secondary market research along with expert opinions and insights from our community of CISOs, CEOs, executives, and advisory council members. 

Key Takeaways

Our inaugural report explores the state of the emerging AI Governance market. Here are three key takeaways: 

Unchecked AI Use and concerns about trust, fairness, security, and explainability

Companies and employees are rapidly integrating Gen AI and LLMs for everything from content creation to workplace productivity. Executives weigh potential benefits like process automations and faster decision-making against risks such as hallucinations, bias, data leakage, and expanded attack surfaces.  

Many employees use Gen AI tools without approval or oversight, introducing invisible risks and contributing to SaaS sprawl and Shadow AI. At the same time, companies utilizing and building AI models struggle to ensure transparency, trust, data security, and explainability. There’s a clear need for robust AI governance and security.  

“CISOs around the world have been asked by their board or audit committee, ‘What AI technologies are my employees using?’ and very few can answer that with consistency and accuracy. Every day employees are making trust decisions about corporate data with third parties that IT and Security are not aware of. Employees are just looking for a new shiny tool that is going to make them more productive- they are not making effective security assessments.”

Russ Spitler Nudge Security
Russell Spitler CEO and Co-Founder, Nudge Security 

Evolving AI stacks, regulations, team structures, and budgets

The pace of change surrounding AI technologies is relentless. AI models rapidly evolve while regulators attempt to keep up- to varying degrees of success. Companies facing heavier regulations may benefit from compliance-focused capabilities.  

In parallel, innovation in AI governance is outpacing demand. Nascent enterprise AI governance structures, teams, committees, and budgets suggest that many vendors may struggle to find buyers. On the other hand, mature buyers have an opportunity to create synergies with complementary tools given the concentration of point solutions.  

Accelerating VC investment and opportunities to solve unmet needs

VC firms are placing big bets on AI Governance startups. Funding in the market has accelerated and is expected to continue its upward march.  

As the AI Governance space becomes crowded with well-funded startups, vendors that develop feature-rich solutions with simple integrations will have an edge. That said, all players in the market have an opportunity to meet demands for trust in AI, improved employee awareness around AI use, and solutions which demonstrate AI’s business impact in terms of ROI and risk.  

Read the full report

To learn more, read the report and find out:  

  • What industry-leading CISOs, executives, and experts have to say about AI Governance and what a compelling solution looks like 
  • Our take on the market (are we bullish or bearish?) and what might change our minds 
  • How we think AI Governance startups can enable safer AI experimentation, integration, and innovation 

 

Acknowledgements

Special thanks to the following experts for their insights and contributions: 

  • Brian Barrios, VP and CSO, Southern California Edison  
  • Eddie Borrero, CISO, Blue Shield of California  
  • Hazel Diez Castaño, Global CISO, Santander  
  • Elena Kvochko, Founder – TrustGuardAI and Adjunct Professor, Cornell University SC Johnson School of Business   
  • Russ Spitler, CEO & Co-Founder, Nudge Security   
  • Christie Terrill, CISO, Bishop Fox  
  • Evan Wolff, Partner and Co-Chair of the Privacy and Cybersecurity Group, Crowell and Moring  
  • Tobias Yergin, Head of Product, Strategic Exploration, Fortune 50 Retailer 

  

For Forgepoint Capital: 

  • Preisha Agarwal, Research Analyst Intern 
  • Kathryn Shih, Venture Partner 
  • Casilda Angulo, Senior Associate 

With the help of Rey Kirton, Conor Higgins, and Tanya Loh.