Investing in AI ethics makes good business sense, but why?

Three years ago, one of the world’s largest retailers put IBM’s AI ethics board on the spot: prove that investing in AI ethics actually makes business sense.

IBM’s Institute for Business Value (IBV) just released its answer: the AI ethics trust engine, a study conducted with the Notre Dame-IBM Technology Ethics Lab. Surveying 915 executives across 19 countries and 18 industries, the study reveals that organizations spending more than 10% of their AI budgets on ethics saw 30% higher operating profit from AI than those spending 5% or less—a performance gap that’s persisted for two years.

“If your employees, your customers, your suppliers don’t trust your AI, they won’t adopt it,” Brian Goehring, Associate Partner and AI Research Lead for IBM’s IBV and one of the study’s authors, told IBM Think in an interview. “Then it’s not even worth the paper that the business case is written on.”

Building that trust pays off: companies investing in AI ethics reported 22% improvement in customer satisfaction and retention, 20% better incident prevention and 19% higher AI adoption rates. A majority (59%) of executives say their ethics efforts delivered results.

Goehring cautions against viewing AI ethics spending as a magic formula. “What we’re not saying is that if you have a terrible strategy, you don’t know AI, and you just sprinkle a little bit of investment on AI ethics, then Bob’s your uncle and you’re going to have a great financial return—that’s obviously not the case,” he said. “But continued investment is a reflection of broader AI capability maturity.”

Still, only one-third of executives said their organizations actually use core AI ethics tools, even though 56% cited trust, bias or explainability as barriers to AI adoption and 62% reported tension between business goals and ethical values.

As AI evolves, organizations recognize their current frameworks won’t suffice. 65% of executives said agentic AI will require stricter ethical oversight than current systems, and 64% said they’ll need to significantly rethink their approaches.

Looking ahead, “I’m a lot more interested in where AI ethics can go as a field—less as it relates to AI per se, and more about the consequences of AI as it relates to society,” Goehring said, pointing to how AI transforms the job skills workers need. The biggest question? How it reshapes the social contract itself.