The rapid advancements in generative AI (GenAI) have left many executives pondering whether their organisations would benefit from appointing a Chief AI Officer (CAIO). This question gains particular relevance following the White House’s March mandate requiring all federal agencies to appoint a CAIO, a move anticipated to create around 100 such positions by the end of May.
For private enterprises, the decision to introduce a CAIO remains complex and nuanced. Michael Queenan, Founder and CEO of Nephos Technologies, a consultancy specializing in data services integrations, offers a critical perspective. Queenan observes that numerous companies within the S&P 250 are either hiring or contemplating the hiring of an AI chief. He likens this trend to the “emperor’s new clothes” scenario, suggesting that many firms may be driven more by the desire to avoid appearing outdated than by a genuine strategic need.
Queenan explains that some organisations might be motivated by concerns over shareholder perceptions or media scrutiny, leading to a hasty appointment of a CAIO without a clear understanding of its necessity or value.
Determining the Necessity of a CAIO
Brian Peterson, Co-founder and CTO of Dialpad, a company renowned for its AI-based customer intelligence platform, provides a more nuanced view on the matter. Peterson argues that the appointment of a CAIO should align with the role AI plays within a business. For organisations where AI is a significant component of their operations or product offerings, a CAIO can provide essential focus and strategic direction. However, if AI is still an emerging concept within the company, Peterson suggests that it might be more prudent to engage a consultant to assess AI’s potential value before committing to a high-level appointment.
The Evolving Role of AI in Organisations
The role of CAIO is not yet ubiquitous and remains a scarce and expensive commodity, as noted by Waseem Ali, CEO of Rockborne, a recruitment consultancy focused on the data and AI sector. Ali reports that CAIOs are predominantly found in fintech, healthtech, e-commerce, and algorithmically driven insurance sectors. He highlights a trend in the LinkedIn Future of Work Report (November 2023), which showed a tripling of the less senior position of Head of AI over the past five years. This shift indicates an increasing interest in AI roles, though the appointment of CAIOs remains relatively rare.
Ali also points out that many companies are converting existing Chief Data Officers (CDOs) into Chief Data and AI Officers (CDAIOs) rather than creating entirely new CAIO positions. This approach reflects the current market’s preference for integrating AI responsibilities into existing roles rather than establishing a separate executive function.
Optimising Existing Resources
Queenan advocates for leveraging existing data science teams to manage AI initiatives. He argues that AI, as an application built on top of existing data products, should be integrated into current processes rather than necessitating a new senior role. In many large organisations, a head of AI reporting to the CIO or CTO might be more appropriate than a standalone CAIO. He believes that organisations need more time to refine their approach to AI and determine whether developing proprietary technology or acquiring off-the-shelf solutions is most beneficial.
Peterson concurs, suggesting that elevating an AI specialist to the top table might be premature for most organisations. He emphasises the importance of assessing the existing board’s expertise and evaluating the true value a CAIO could bring before making such an appointment.
The Ideal CAIO Profile
For organisations determined to appoint a CAIO, Ali outlines the essential attributes required for the role. An ideal CAIO should possess strategic vision, effective communication skills, and the ability to manage board expectations regarding AI’s capabilities and limitations. This role also demands an understanding of the ethical, reputational, and regulatory challenges associated with GenAI.
Peterson adds that organisations must ensure adequate support for their CAIO, including financial resources and prioritisation. Simply assigning the title without backing it with substantive resources and strategic commitment could undermine the role’s effectiveness and potentially lead to failure.
In conclusion, while the appointment of a Chief AI Officer can offer significant advantages, it should be approached with careful consideration of the organisation’s current AI landscape and strategic needs. As the field of AI continues to evolve, so too will the roles and responsibilities associated with this emerging position.
