5 days Ago By Julie Bort
Every IPO S-1 prospectus includes a section listing all kinds risk factors for why its stock may not be a good buy. Many of them are boilerplate warnings, cautions over financial performance, or acts of war and nature. But some of them are more specific to the company.
With ServiceTitan, a cloud service startup that filed public IPO documents with the SEC on Monday, we may be witnessing the birth of a new boilerplate warning: large language models (LLMs) that help grow business could also lead to damage. ServiceTitan had an 1,150-word risk factor on how its use of AI, specifically generative AI, could adversely impact its business. It warned that LLM hallucinatory behavior could produce “inaccurate” information and engage in “discriminatory” behaviors; its LLMs could infringe on others’ copyright or intellectual property; and using LLMs means exposing more data to potential hacks and harm.
Then again, if it can’t get enough data, it may not be able to continue offering AI products or building new ones. On top of that, the company cautions that its employees or contractors could possibly mistakenly share its customers’ private data with third-party systems that could then lead to security breaches, or use that data to train their models. ServiceTitan warns that its use of AI may one day run afoul of social and ethical issues.
Or that future regulations could cost it money. ServiceTitan also fears that it may not be able to hire the AI experts it needs for its products and, even if it can, that talent will be pricey. ServiceTitan warns its AI products rely on third-party services it doesn’t control — and specifically names Microsoft and OpenAI.
So, if they become unavailable or have issues, that’s a risk too. These warnings are interesting because ServiceTitan operates at the nexus of the industries that GenAI, specifically LLM-driven AI agents, is expected to dominate. ServiceTitan offers software for field service industry businesses — largely small businesses, think construction contractors, HVAC professionals, landscapers, and the like.
Its software performs functions like marketing, customer relationship management, customer support, and accounting. (ServiceTitan declined further comment.) AI agents are currently marching so furiously toward all things sales, marketing, and CRM that the king of the CRM market, Salesforce CEO Marc Benioff, told TechCrunch that his company alone could have a billion AI agents working at Salesforce’s customers’ companies in a year.
ServiceTitan has been offering AI-powered services since at least 2023, called Titan Intelligence. In October, it also rolled out a suite of AI agents for sales, customer service, and call centers. But LLMs were designed to study words, images, and data and create their own versions of things.
That is, they were designed to make stuff up. OpenAI’s scientists are busy racing toward general intelligence — mimicking humans’ ability to infer even better — meaning they are working on AI that they hope will be even more creative. Sure, LLM reliability for business usage is something that should be solved over time as more companies specialize in agents where reliability, not creativity, is essential.
But it’s worth noting that those that are selling AI bots today are actually saying the quiet part out loud in their legalese: At this early stage, AI adoption could create as many problems as it solves..
