Is now the right time to appoint a chief AI officer?

The rapid advance of GenAI has been bewildering. No wonder many business leaders are considering whether they’d benefit from the guidance of a strategic-level expert in the field

Business leader engaging with his team

In March, the White House announced that all federal agencies in the US would have to appoint a chief AI officer to strengthen their governance in respect of the technology. The mandate is expected to create about 100 such CAIOs by the end of May.

Should other enterprises follow suit? “It depends” is the answer that most experts will give. 

One of them is Michael Queenan, founder and CEO of Nephos Technologies, a consultancy specialising in data services integrations. He notes that many of the S&P 250 are hiring, or talking about hiring, an AI chief of some description. But he compares this to an “emperor’s new clothes” scenario, suggesting that firms are “often not giving enough thought” to why they really need one. 

Their reasoning may be no more complex than “they don’t want to be seen as the company that doesn’t have one, lest they’re asked why not at the next shareholder meeting or on CNN and their share price falls”, Queenan explains.

Does your firm really need a CAIO?

The decision whether to hire an AI supremo or not should be based on how central the technology already is to the business. That’s the view of Brian Peterson, co-founder and CTO of Dialpad, the creator of an AI-based customer intelligence platform. 

“If AI is a big element of your business or you’re building it into your product set, having a CAIO would provide focus. But, if it just seems cool and could be part of your future but you’re not sure how yet, appointing one might not be right for you,” he says, suggesting that it would make more sense in the latter scenario to hire a consultant first to assess the technology’s potential value to the firm.

In any case, CAIOs are a scarce and costly commodity, reports Waseem Ali, CEO of Rockborne, a recruitment consultancy specialising in the data and AI sector.

“We’re not seeing many on the market,” he says, noting that they’re mostly working in “sectors such as fintech and healthtech. Ecommerce companies and some insurance firms that are algorithmically driven have been hiring them too.” 

Ali also points to the Future of Work Report published by LinkedIn in November 2023. This indicated that the number of employers creating the less senior role of head of AI had more than tripled in five years. 

He has observed “more chief data officers than anyone else absorbing the AI remit to become chief data and AI officers, while some organisations are simply turning their CDOs into CAIOs. You don’t see this conversion happen as much with CIOs or CTOs unless they have a data remit.”

Making the most of what you’ve got

The absorption of roles makes sense to Queenan, who says: “Companies should absolutely get across AI, but most large ones already have the data science people and processes in place to do that. AI is an app that sits on top of your data, which means it’s just another data product. So, if you already have a team creating such things, this is simply adding a string to their bow.”

He believes that having “a head of AI who reports to the CIO or CTO is more than sufficient in most cases. In five years’ time, there could be a real need for a powerful job title such as CAIO, but it’s too early for it now.”

Queenan’s view is that organisations generally need more time to work out how to “do AI better” and decide whether they will benefit most from developing their own tech or buying off-the-shelf products. Most firms already seeking to hire a CAIO are “putting the cart too far in front of the horse”, he argues. 

Peterson agrees that granting an AI specialist a seat at the top table now would be overkill in most organisations. 

“It depends on what expertise there already is on the board, whether you need it and what value a CAIO could bring,” he says. “But, if you’re not a tech company and AI isn’t core to your business, it probably isn’t necessary.”

This view is borne out in the wider recruitment market – Ali has seen few C-level appointments to date, although he reports that firms are getting more interested in finding non-executive directors with AI knowledge. 

Who makes an ideal CAIO?

Anyone seeking to become an AI chief must demonstrate a range of top-level skills, including strategic thinking and effective communication, according to Ali. A CAIO will be able to manage the board’s expectations about what the technology can and cannot do and explain likely outcomes in a language that its members can relate to. This includes expressing where AI tools could add value by reducing costs, for instance.

Equally important is the ability to track, understand and explain the evolving governance issues surrounding GenAI, including the ethical, reputational and regulatory risks it poses.

A final consideration, if your company is set on hiring an AI chief, is to “put your money where your mouth is” and equip the successful candidate adequately, Peterson argues.

“You can’t just hire a CIAO, give them that big title with lots of expectations and leave them to it,” he warns. “You need to support them by putting money, resources and prioritisation behind it. Otherwise, you’ll be setting them up to fail.”