Chief AI Officers Are Taking Over the C-Suite – What’s Next?

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KEY TAKEAWAYS

  • The rising role of the Chief AI Officer (CAIO) in the corporate world reflects the growing importance of artificial intelligence (AI) in business strategy.
  • Foundry's AI Priorities Study 2023 revealed that 15% of enterprise companies already have a CAIO, with 24% actively seeking candidates.
  • Industry leaders like Deloitte, Dell Technologies, and Intel Corporation have installed CAIOs.
  • While some question the need for this role, others see the CAIO as essential for organizations.
  • A lot will ride on an organization's AI maturity and strategic priorities.

There’s a new role taking over the C-suite; the Chief AI Officer (CAIO).

Foundry’s AI Priorities Study 2023 revealed that 15% of enterprise companies have a chief AI officer, while 24% are seeking qualified candidates.

It’s a new and burgeoning role: According to the Financial Times, positions for a CAIO role have tripled over the past five years.

It’s not surprising, given the interest sparked by generative AI following the high-profile success of ChatGPT and every large language model (LLM) that followed: we may be in a world where you adopt artificial intelligence, or get left behind.

In the same way, a Chief Information Security Officer (CISO) acts as a champion of security investment and initiatives, the chief AI officer spearheads the adoption of AI in the enterprise.

And government is following suit — the White House Office of Management and Budget introduced a requirement for federal agencies to designate a chief AI officer who “will coordinate the use of AI across their agencies.”

Introducing the Chief AI Officer

The hype behind generative AI has led to the creation of lots of AI-specific positions, most notably that of the prompt engineer, a position that requires entering crafted prompts into generative AI chatbots to get the best answers. Some positions have been offering up to $375,000 a year to prompt engineers without a technical degree.

Now, the increase in interest in the Chief AI officer role highlights that AI-centric skills are becoming a focus at the C-suite level. Adoptees recognize that new leadership is required to take advantage of the technology. But what does the job mean on a day-to-day basis?

Brian Jackson, principal research director at Info-Tech Research Group, told Techopedia:

“A chief AI officer in the technology sector is expected to provide strategic leadership, ethical guidance, and innovative architecture capabilities.”

In practice, this includes not only identifying what tools and expertise to invest in to enhance an organization’s machine learning models but also building an AI-friendly organizational culture, advocating for ethical and responsible AI development, and developing mechanisms to collect and process data in a way that avoids legal or compliance risks.

Jackson suggests that these C-suite execs should have solid experience working on the organization’s AI initiatives but notes that “since it is still in the early days of deploying AI to the enterprise, this sort of experience will obviously come at a premium,” Jackson said.

The type of premium paid depends on the level of expertise — but Fortune reports that compensation packages for CAIOs average over $1 million.

In comparison, Glassdoor suggests a more conservative range between $283,000-528,000 annually.

Do Most Organizations Really Need a Chief AI Officer?

One of the big questions created by the rise in CAIO roles is whether it is necessary — could it be covered by existing positions such as the Chief Technology Officer (CTO), who traditionally manages technology strategy?

The answer to this largely depends on the extent to which an organization’s operations depend on AI development.

For most organizations, an AI-savvy CTO or Chief Information Officer (CIO) would likely suffice, but for market leaders in competitive industries, a chief AI officer could be a critical resource.

Yash Sheth, co-founder of generative AI startup Galileo, told Techopedia:

“If AI is becoming a larger role where you have an AI-powered offering as the core of the business, then it is more necessary to have someone to act as a Chief AI Officer.

“The role of the Chief AI Officer, in this instance, should focus on the AI vision of the organization, evangelizing AI across the company, directing the organization’s strategy and working with policy and governance teams to help make AI initiatives successful, not implementing apps or building language models necessarily.”

In short, it is a leadership position for organizations that need to pursue AI excellence and optimize their maturity in this solution category. For these organizations, there’s money on the table both from a venture capital perspective and direct revenue – so it may make sense to build up internal AI leadership.

That being said, Jackson highlights that there’s no reason why a CTO couldn’t fulfill this role.

“A CTO is traditionally focused on executing a technology strategy to produce external value for customers. If part of that strategy is going to include AI but not require substantial investment in building new AI technology, then perhaps it can fit within a CTO’s mandate.”

Which Companies Have Chief AI Officers So Far?

A handful of names stand out among the companies that have appointed a dedicated CAIO, including top enterprise companies like Deloitte, Dell Technologies, Intel Corporation, and IBM.

Other established organizations like Microsoft have also adopted execs with similar titles – such as the chief responsible AI officer.

While these large companies adopting the title doesn’t necessarily justify its existence, it does highlight that top names in the industry see the position as a way to strengthen their AI leadership and performance.

However, it’s important to note that many AI leaders, such as OpenAI, Anthropic, and Google, don’t have chief AI officers. This shows that this position isn’t essential to succeeding in the industry providing that you do have leaders available to guide AI adoption and development.

From this perspective, whether an organization needs a CAIO depends on whether its existing leaders have sufficient AI literacy and expertise to compete with their competitors.

If they don’t, enlisting the help of a specialist AI advocate could help to close this gap.

The Bottom Line

Having a chief AI officer isn’t necessary for most organizations, but it can be valuable for those who want to optimize AI-driven operations.

After all, not every CEO or CTO will have the hands-on experience necessary to keep up with the latest innovations in AI — not at the pace the industry moves.

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