Challenges Faced by Technology Companies: A summarize of risk and mitigation methods

Yihao Yang ()
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Yihao Yang: Shanghai QibaoDwight High School

A chapter in Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024), 2025, pp 426-435 from Springer

Abstract: Abstract Companies involved in AI, such as Google, Microsoft, Amazon, Apple, IBM, Tesla, NVIDIA, Facebook, Intel, and Alibaba, faced a couple of risks during their operation, as referred by their annual reports for the year 2023. Of all the risks mentioned by more than one company, including collectibility risk, commodity price risk, credit risk, cybersecurity risk, equity price risk, exchange rate risk, inventory risk, residual risk, risk related to debt obligations, risk related to intellectual property, risk of product defects, errata, or other product issues, risk related to labors, risk related to legal and regulatory, risk related to ownership of company’s stock, and supply chain risk, foreign exchange risk is the risk that all mentioned companies identified. In contrast, the least identified risks among the mentioned companies are the commodity price risk, residual risk, and risk related to debt obligations. They mitigated them by entering into hedging activities and performing risk assessments. During the process of business operation, development, and expansion, risks are inevitable. This research selected ten companies and organized the risks they bore and the approaches and procedures they have been implementing to reduce the risks. For example, to reduce exchange and interest rate risk, chosen companies entered into derivatives and risk assessments to maximize their economic effectiveness position.

Keywords: Risks; mitigation; financial statement analysis; corporate governance (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-652-9_45

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