Chief AI officer: A necessity for companies or an expensive impediment?

“At 99% of companies, a CAIO creates overlap with the [chief technology officer] and [chief information officer]. Unless you’re a pure AI company or a really large organization, do you need a CAIO? Not really,” Bryan Wise, chief information officer at software company 6Sense, said in an interview.

Tensions with the chief technology officer and chief information officer over ambiguous lines of responsibility have long dogged the role of chief data officer, and that could also be true for a CAIO, contends Nick Elprin, co-founder and chief executive of Domino Data Lab, a provider of enterprise AI software. Unless organizations make deep structural changes, he warns, there will be a CAIO exodus in the next 18 months.

Ashley Kramer, chief strategy and marketing officer at GitLab Inc.
GTLB,
+1.82%,
 which provides code-hosting and collaboration-platform services, doesn’t see the CAIO role as a long-term one. “As we saw with the rise and fall of the chief cloud officer position more than a decade ago, the popularity of the CAIO role will be temporary,” she said. “As AI technology matures and becomes more of a standard across businesses, eventually, CIOs and CTOs will be responsible for their organizations’ AI strategies, just as they are for cloud strategies today.” 

However, self-described AI anthropologist Cliff Jurkiewicz is convinced that the role will “grow over time” and that there will be a “separation of powers” with other executive positions.

“You can’t lump it into the roles of a CTO and CIO,” he said.

But hiring a qualified candidate is proving to be a challenge amid a rush by nearly every large company to cash in on the generative-AI craze.

“They are impossible to find, but they are indispensable as we shift from digital transformation to exponential transformation,” said David Mathison, chair and CEO of the CAIO Summit, which was held for the first time last year in Boston. Among the summit’s goals is helping to educate and train chief AI officers through certificate programs.

The dearth of qualified candidates is a major reason some big corporations are willing to fork over a seven-figure salary package to land a chief AI officer, Mathison said.

The median salary for a private-sector CAIO is about $300,000, according to Glassdoor’s database.

“AI is the next evolution of cloud computing,” said Reid Christian, general partner at CRV, a Silicon Valley venture-capital firm. “When we look back 10 years from now, every digital product is going to have AI as a part of it. It isn’t just about one hire. Your whole organization needs to be oriented around AI.”

But even as organizations look to harness the transformative technology, many executives believe the position is an unnecessary one that will only muck up their company’s organizational chart and lead to C-suite turf wars. 

“Companies don’t need a chief AI officer,” David Berkowitz, founder of the AI Marketers Guild, said in an interview. ”The role might be a short-term fix, but it will go the way of the chief metaverse officer, chief digital officer or chief innovation officer.”

He continued: “AI affects everyone’s role and job, so one person alone can’t manage that. Each business segment — marketing, sales, customer support, HR, legal, R&D — they all need folks with AI expertise.”

And while some organizations might require someone to jump-start an AI program, the job goes far beyond a single individual. “AI isn’t a solo sport,” Greg Verdino, founder of CognitivePath Research, a research and advisory firm, said in an email. “So it’s also worth considering the creation of a multi-stakeholder, cross-functional AI leadership council or center of excellence rather than vesting authority into an individual.”

The CAIO stampede

The Silicon Valley parlor game over the merits of having a CAIO belie the stampede by companies to find someone to help map their AI strategy.

Tech companies, law firms, hospitals, insurance companies, government agencies and universities are baking AI into projects ranging from chatbots that can help write computer code and analyze customer data to automated auditing processes.

But only 27% of 3,400 C-suite execs said their companies are ready to scale up with generative AI, according to a recent Accenture survey.

Mathison estimates that worldwide, there are about 300 people with the CAIO title at major organizations — those with at least $100 million in annual sales — and he says the appetite for them is growing.

In a recent search on LinkedIn for the title “chief AI officer,” Mathison found 781 results among major companies, compared with 600 such results in 2023, 500 in 2022, 400 in 2021 and 250 in 2020.

Among the largest companies with CAIOs are SAP
SAP,
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Dell Technologies Inc.
DELL,
+4.40%,
eBay Inc.
EBAY,
-0.68%
and Zscaler Inc.
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+2.72%.

Philipp Herzig, who has years of engineering experience in data mining, cloud computing and deep learning, became SAP’s first CAIO on Jan. 1. His role, in which he works closely with the chief technology officer and chief design officer, is considered crucial for building AI capabilities into the company’s products and for their commercialization. “This is core to what SAP does,” he said in an interview. “We are all in on AI.”

At Dell, Jeff Boudreau has collaborated closely with the company’s chief technology officer and chief information officer since he became Dell’s first CAIO four months ago. “This [CAIO post] is Dell’s top priority of the year,” Boudreau said, and one that will allow the company to “define and refine” an AI strategy.

“If I do my job, I may become chief productivity officer at some future date,” he said.

“If a business is AI-first, this is a necessary role,” said Dan O’Connell, CAIO and chief strategy officer at Dialpad Inc., an AI-powered customer-intelligence platform. “Otherwise, this role is shared among the chief product officer and [chief technology officer].”

But even AI execs acknowledge that the CAIO post may not be around forever. “CAIO is not a long-term title beyond three to five years. But it is incredibly important for organizations to decide,” Steve Chase, vice chair of KPMG’s Artificial Intelligence and Digital Innovation organization, said in an interview.

Mathison noted that the Biden administration is adding CAIO positions throughout the government — last year, more than 400 federal departments and agencies were looking for CAIOs to comply with an executive order by President Joe Biden that aimed to create safeguards around the technology.

“In three to five years, those companies addressing CAIO right now will be well ahead of everyone else,” Mathison said.

Ed Wiley, a generative-AI business instructor at online-learning platform Udacity Inc., said a June 2023 search on LinkedIn returned 11,000 individuals with the title of chief data officer and 423 with the title of chief AI officer. In February 2024, he found there were around 12,000 chief data officers and more than 2,600 CAIOs.

Some argue that a company should have a chief privacy officer in place before hiring a CAIO and dealing with the attendant regulatory and ethical issues of using the technology. “Companies must first ensure that their privacy practices are robust and forward-looking, laying the groundwork for the responsible and ethical use of AI,” Bill Porter, head of marketing at Privaini, an India-based company that provides digital-privacy software, said in an email.

“A director-level position overseeing regulatory adherence, keeping the company abreast of opportunities, should probably be enough [for AI],” social-media strategist Michael Durwin said. “After all, almost every company has been using some form of AI for over a decade at this point.“

But executives remain split on whether a CAIO is a necessity or an albatross.

“AI is advancing at such a pace that there is absolutely a need for a senior AI role within organizations,” said Hitesh Sheth, CEO of cybersecurity company Vectra AI.

Meanwhile, Casey Ellis counters that argument. “I’m not convinced that too many organizations need a chief AI officer,” said Ellis, who is founder and chief strategy officer at Bugcrowd, an IT security company. “The number of larger organizations where AI is, in practice, a part of the core strategy is still comparatively small.“