Perspectives

What is Generative AI?

The CLO’s guide to Generative AI risks and opportunities

What Generative AI is

A subset of AI that empowers machines to imitate the creative human process to produce original content such as text, images, code, voice, and video rather than merely interpreting existing data.1 Generative AI (GenAI) has the potential to add contextual awareness and humanlike decision-making to enterprise workflow. It is powered by large datasets or foundation models, and the algorithms utilized to interpret this data are modeled after the neurons of the human brain. GenAI is different from earlier iterations of AI in three key ways:

01. It’s trained on a large set of data

02. It’s designed to respond to natural language instructions

03. It can generate unique content that looks and sounds like it was created by a human2

What Generative AI is not

Various forms of AI were in use before the advent of GenAI. While these technologies could automate tasks, uncovering patterns and correlations, and making predictions about the future based on current and historical data, the precursors to GenAI lacked the ability to mimic the human creative and decision-making processes that appear to have the same fidelity as human-created artifacts.3 The following forms of artificial intelligence are representative of traditional AI, not Generative AI:

01. Intelligent automation

02. Predictive analytics

03. Machine learning

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Resources

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Other Generative AI topics to explore

Learn about other areas of GenAI and how it impacts CLOs and their teams. From the basics to the more complex challenges, these resources are designed to help you navigate GenAI’s legal implications and risks with ease. 

1 Deloitte, "Benefits and limitations of Generative AI," 2023. See also, The EU Artificial Intelligence Act, June 14, 2023, which defines AI as “a system that is designed to operate with a certain level of autonomy and that, based on machine and/or human-provided data and inputs, infers how to achieve a given set of human-defined objectives using machine learning and/or logic– and knowledge-based approaches, and produces system-generated outputs such as content (Generative AI systems), predictions, recommendations or decisions, influencing the environments with which the AI system interacts.

2 Deloitte AI Institute, Generative AI is all the rage, 2023.

3 Deloitte AI Institute, A new frontier in artificial intelligence, 2023.

Get in touch

J. Donald Fancher profile image

J. Donald Fancher

Principal - Deloitte Risk & Financial
Advisory | Leader -
Chief Legal Officer Program
Manager | Deloitte Risk & Financial Advisory
Deloitte Transactions and Business Analytics LLP

dfancher@deloitte.com

Erin Hess profile image

Erin Hess

Chief Legal Officer Program
Research and Insights Manager
Manager | Deloitte Risk &
Financial Advisory
Deloitte Transactions and
Business Analytics LLP

erhess@deloitte.com

Jon Foster profile image

Jon Foster

Managing Director | Deloitte Risk &
Financial Advisory
Deloitte Transactions and
Business Analytics LLP

jonfoster@deloitte.com

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