Breaking news

Trustworthy AI Is Emerging As A Business Advantage, Not Just A Governance Issue

Artificial intelligence may be transforming enterprise operations at unprecedented speed, but a new study from SAS and IDC suggests that the organisations seeing the strongest returns are not simply those deploying more AI. They are the ones governing it better.

The second annual Data and AI Impact Report, titled The New Economics Of Trust, found that organisations applying what the researchers describe as trustworthy AI practices were 15 times more likely to report strong or high returns on investment from their AI initiatives.

Governance Is Now A Performance Driver

According to the study, enterprises with the strongest governance, data quality and auditability practices reported at least twice the return on investment from AI deployments compared with other organisations. While SAS noted that these leaders still represent a relatively small segment of the market, their advantage is clear: trust is becoming a source of competitive differentiation.

At the other end of the spectrum, fewer than one in 20 organisations classified as laggards in trustworthy AI reported similarly strong returns.

“When AI works, it’s incredibly impactful,” said SAS chief technology officer Bryan Harris. “However, it is well documented that state-of-the-art agents can have error rates that exceed 25 per cent on complex tasks, which is unacceptable in high-stakes decision-making.”

Harris added that organisations must embed domain expertise into agentic workflows while keeping people at the centre of governance and oversight. “Organisations that do this successfully will close the trust gap and gain a competitive advantage in the market with AI,” he said.

Why Trust Is Becoming A Scaling Requirement

IDC vice president Chris Marshall said the challenge is intensifying as AI systems become more autonomous. “As AI becomes more autonomous, organisations face a new challenge: maintaining confidence in systems people don’t fully understand,” he said.

“Our findings show that stronger oversight, explainability, accountability and data foundations are becoming prerequisites for scaling AI successfully,” Marshall added.

The report found that employees frequently override AI-generated recommendations, with a lack of explanation emerging as the leading reason. Researchers said users were increasingly unwilling to rely on systems when they could not determine whether the output was correct or understand how the model reached its conclusion.

That trust deficit becomes more costly as AI systems take on greater autonomy. Manual corrections can slow workflows, reduce productivity and erode profitability, even when the underlying model is technically capable of making accurate recommendations.

According to the study, 97.2 per cent of users override AI-generated recommendations in at least some cases. The most common reason, regardless of whether employees believed the output was correct, was that the system could not explain its reasoning.

Autonomy Increases Both Opportunity And Risk

The report also found that trust declines as systems become more autonomous, falling from 76 per cent for generative AI to 66 per cent for agentic AI. That drop matters because organisations are increasingly deploying AI in settings where decisions are more consequential and less transparent.

SAS and IDC said the findings point to a widening performance gap between organisations that prioritise trustworthy AI and those that do not. The difference, they argued, is not necessarily the technology itself, but how it is managed and governed.

Organisations investing in trustworthy AI measures were 15 times more likely to report strong or high returns on investment, with 62 per cent doing so compared with 4 per cent among organisations without such practices. Those with the strongest trustworthy AI capabilities also reported 1.85 times greater gains across 13 business outcomes, including revenue growth, cost savings and customer experience.

The study further found that 85 per cent of AI leaders with strong trustworthy AI practices were increasing investment in the area by more than 10 per cent in 2026, a signal that the gap may widen further.

Data Foundations Remain A Bottleneck

Beyond governance, the research highlighted weak or outdated data foundations as another major barrier to adoption. SAS and IDC said many organisations are still deploying AI on underdeveloped data infrastructure, limiting their ability to deliver the transparency and explainability required for effective oversight.

Only 17.5 per cent of enterprises were found to have a fully optimised data infrastructure mature enough to meet the demands of agentic AI. Organisations with such a foundation were four times more likely to expect strong returns from AI projects and six times more likely to require data quality and explainability controls designed to build trust.

The study was based on a global survey of 2,699 decision-makers with knowledge of or influence over their organisations’ data and AI programmes across 28 countries and four industries: banking, insurance, life sciences and the public sector.

Industry Leaders Are Treating Governance Differently

In banking, 85 per cent of AI leaders had established AI governance frameworks, compared with just 29 per cent of organisations classified as laggards. The report said leading banks are increasingly viewing AI governance as both a competitive and operational issue, not merely a compliance obligation.

In the public sector, 41 per cent of leaders said they were increasing investment in trustworthy AI by more than 20 per cent in the coming year, one of the highest rates across the survey.

Life sciences showed another important pattern: 23 per cent of organisations had scaled AI across their entire companies, the highest proportion among the four sectors studied.

What The Report Means By Trustworthy AI

SAS and IDC define trustworthy AI as artificial intelligence designed to be reliable, fair, secure and compliant with regulatory requirements, while also being able to explain how it reached a decision.

The report argues that users and decision-makers across an organisation should be able to hold an AI system to a predetermined chain of accountability when its output is incorrect or absent. In practice, that means AI cannot be treated as a black box if it is expected to support high-stakes decisions at scale.

The companies assessed organisations across five dimensions of trustworthy AI and scored them out of 100. Those with an average score of at least 80 were classified as trustworthy AI leaders.

The five dimensions were data quality and governance, model governance and oversight, explainability and fairness, responsible AI policy, and audit and accountability.

The message from the report is unmistakable: in the next phase of AI adoption, the winners may not be those experimenting the fastest, but those building the strongest foundations of trust.

LVMH Revenue Rises, But China Weakness Continues To Weigh On Luxury Giant

A Softer Quarter Exposes The Limits Of Luxury’s Recovery

LVMH, the world’s largest luxury group and parent of Louis Vuitton, Dior, Celine and Hennessy, reported revenue of €18.5 billion in the three months to the end of September, underscoring both the scale of its business and the pressure building across parts of the luxury market.

The company’s revenue rose 1.2% year on year in the third quarter, following a 0.1% increase in the second quarter and a 5.9% decline in the first. The trajectory points to stabilization, but not yet to a convincing rebound.

Organic Growth Misses Expectations

Organic sales growth, which strips out currency effects and portfolio changes, slowed to 1% in the third quarter from 3% in the previous quarter. That result fell short of market expectations and reinforced concerns that the luxury cycle remains uneven.

For the first nine months of the year, LVMH generated sales of €57.1 billion, with organic growth of 2%.

In its statement, the company highlighted the breadth of its portfolio, saying that diversification continues to provide resilience in an uncertain geopolitical and economic environment. That remains one of LVMH’s defining strengths: when one category weakens, another can help offset the downturn.

China Remains The Key Pressure Point

LVMH said sales performed well in the United States, Europe and Japan, but conditions in China remained less favorable. That matters because the country has long been one of the most important growth engines for global luxury brands.

The fashion and leather goods division, LVMH’s most closely watched unit, saw organic sales fall 5% as weaker demand in China weighed on performance. Deutsche Bank said the decline was steeper than the roughly 2% drop expected by analysts.

The segment had delivered its first organic sales gain in two years in the previous quarter, making the latest retreat a notable setback.

Brand Equity Faces A Test In China

The quarter also highlighted the reputational risks facing global brands in China. Louis Vuitton drew criticism after suing local tea company Molly Tea over logo copying. Although the company won the case, the dispute sparked social media backlash and boycott calls, adding another layer of pressure to an already fragile environment.

For a company built on scarcity, aspiration and brand discipline, perception is an asset as valuable as inventory. In a market as digitally connected as China, that asset can shift quickly.

Mixed Performance Across The Portfolio

Not every division weakened. LVMH’s selective retailing business, which includes Sephora, posted an 8% organic sales increase. Watches and jewellery, along with wines and spirits, both recorded 6% organic gains.

That broad mix is precisely what has historically given LVMH an advantage over rivals: it can absorb softness in one category without relying on a single growth driver.

Analysts See A Longer Recovery Ahead

Deutsche Bank analysts said the results could lead to further cuts in earnings forecasts for the second half of 2026 and 2027. They added that it is difficult to see what could improve investor sentiment in the near term.

Still, the bank framed the weakness as cyclical rather than structural. In its view, recovery is taking longer because Chinese demand remains subdued, but the problem does not appear to reflect a permanent deterioration in the brand franchise. Analysts said ongoing brand initiatives are beginning to show results, though improvements are likely to remain gradual.

Investor Pressure Continues To Mount

LVMH’s share price has fallen nearly 40% since the start of the year. In September, L’Oréal overtook the group as France’s most valuable listed company, a symbolic shift that captures how sharply sentiment has changed.

Shares in LVMH were down more than 1.6% in Paris around 10 a.m. CEST following the release.

eCredo
Aretilaw firm
Uol
The Future Forbes Realty Global Properties

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter