The Chief AI Officer Is Here. It’s Time to Make Room in the C-Suite

President Biden’s executive order on AI requires all federal agencies to hire a chief artificial intelligence officer (CAIO) to coordinate the adoption of AI, following a handful of companies that have established the role in recent years.

The White House mandate is expected to prompt a wave of new hires across the private sector, as an increasing number of companies consider the value of a CAIO and the role this new figure will play in the boardroom.

Having an AI expert in the C-suite – someone who understands both its risks and its potential – is imperative now, says Jim Tiller, global CISO of technology consulting and talent acquisition company Nash Squared.

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“You will see organizations start to align themselves [with federal agencies], especially those in the defense industrial base,” Tiller predicts, referring to the roughly 300,000 companies nationwide that provide services to the Department of Defense and other branches of the federal government.

That CAIO hiring is underway, and not just at defense contractors. Anti-money-laundering company Fortytwo Data appointed a CAIO in 2018, and a year later denim giant Levi’s hired its first CAIO, as did Aramark, a Fortune-500 food-services firm. ServiceNow established the role in 2020, followed by Deloitte, eBay, IBM, Intel, and the Department of Health and Human Services in 2021. In just the last six months, new CAIOs joined the ranks in various sectors, including tech (Dell, ATMECS), telecom (BT), consulting (Accenture), education (Ontario’s Western University), insurance (Cover Whale), healthcare (UC Davis Health, Mayo Clinic Arizona), and at the Department of Homeland Security.

As more and more organizations have adopted various forms of generative AI-fueled technology – including ChatGPT, which launched a year ago – the need for someone at every enterprise to oversee those efforts, especially the intersection of AI and cybersecurity, has grown increasingly apparent. But where to find these professionals? And what skills are required? Here’s what business leaders need to know as they undertake the search.

What is a chief AI officer?

The CAIO role will likely vary from organization to organization, but it will require a job candidate who can juggle the creation, testing, and deployment of new (and often controversial) AI technologies; set legal, risk, and compliance policies; and measure the financial impact of all these new initiatives.

Companies that adopt the CAIO role will be in a far better position two or three years from now than those that don’t.

The decision to hire depends a lot on one’s appetite for change. Firms that have appointed a CAIO recognize the potential for AI to change things even more rapidly than digital transformation did, says David Mathison, founder of CDO Club, a community of C-suite digital, data, and analytics leaders.

“Those companies that digitally transformed are still here, and if the pandemic didn’t prove [the value of such agility], I don’t know what else it’s going to take,” says Mathison, who is now preparing the Club’s first Chief AI Officer Summit, to be held in Boston in December. (See below for more info.) “I believe those companies that do adopt the CAIO role will be in a far better position two or three years from now than those that don’t.”

What sets the chief AI officer apart

Some companies will be more prepared to use a CAIO than others. A lot depends on their ability to handle the data on which AI depends, notes Stephen J. Andriole, a professor of business technology at the Villanova School of Business.

Many subject-matter experts… weren’t traditionally used to operating in the C-suite. [They lacked] the communication skills and the political skills.

“The CAIO should hit the ground running, so they will be most effective when data maturity is at a deployable level,” says Andriole, referring to a company’s ability to leverage data for decision-making, rather than just “following one’s gut” or sticking to (possibly outdated) traditions. That means understanding not just the structured data a company possesses but also the unstructured data residing in everything from word processing and spreadsheet documents to audio files. Data resides everywhere, he says, and companies must seek it out. “If a company sees data just as what’s in a data warehouse, it’s already in trouble.”

This need to understand and manage a vast trove of corporate data spawned the chief data officer (CDO) role over the last 15 years, and many companies may be tempted to saddle their CDO with these new AI tasks. Don’t, says Tiller, noting that the two positions have different purposes.

“A CDO focuses more on the orchestration and management of typically structured data, which bleeds into privacy and the use of that data with business intelligence-type activities,” he says. This latter focus is why many CDOs have become CDAOs, with the ‘A’ standing for analytics.

Tiller contrasts CDOs or CDAOs with dedicated AI roles. He sees the two roles as collaborative: A CAIO’s job involves developing strategies for the use of fast-evolving technologies like generative AI. They must also support its ethical use, ensuring that they avoid algorithmic bias and that their use of training data is transparent. All of this relies on their work with IT teams to create the technical infrastructure that will support AI efforts.

[Read also: Hiring a CAIO is just the start – here are 3 big business takeaways from Biden’s AI executive order]

The CDO’s role focuses more on creating a reliable flow of appropriate data to fuel the CAIO’s strategy, Tiller explains: “The CDO will hopefully bring a little bit of stability to that underlying critical data as part of the business’s operating model.”

A good chief AI officer is hard to find

While a dual role can work well, Mathison wants CDOs who have evolved sufficiently in their role to make a case for taking on AI responsibilities. They might have to, he warns, because individuals with the right skills will be difficult to find.

“The challenge we’re going to have with this CAIO title is there’s a tremendous amount of demand and a very limited supply,” he warns. “Salaries are going to go through the roof, the talented ones are already taken, and you’re going to see job descriptions rapidly evolving because of the nature of exponential technology.”

AI will be a multi-disciplinary initiative that touches every part of the organization, requiring a high level of political savvy and organizational expertise, says Tiller. A CAIO cannot afford to be the C-suite’s pet technical expert, relegated to the corner of the boardroom to take orders, he adds. Yet he warns that many dedicated CAIOs are likely to come from technical AI backgrounds and lack C-suite experience. They will need to learn how to speak the C-suite’s language to secure senior executive support for broad strategic initiatives like AI.

[Read also: How CISOs can talk cyber risk so that CEOs actually listen]

CAIOs who are new to senior management can take a tip from CDOs, who were in the same position several years ago. CDOs have spent years winning trust from the C-suite to implement similarly wide-ranging data management and governance projects, says Randy Bean, founder of strategic advisory firm NewVantage Partners. “There were many subject-matter experts who were elevated to the role of CDO and they weren’t traditionally used to operating in the C suite,” he explains. “[They lacked] the communication skills and the political skills.”

They learned. So will CAIOs.

The AI playbook: Guardrails first, roller-coaster ride later

A successful CAIO’s skill set must be wide-ranging. Companies should not underestimate the strategic development and implementation needed for an AI initiative, say experts.

Way too many AI ‘experts’ are anything but.

A CAIO must also see the job as a journey with an arc, one that begins with a focus on managing risk before exploring AI’s vast opportunities, warns Bean. Having spent over a decade studying CDOs, he notes that they also started off focusing on governance and risk before evolving into analytics and other revenue-generating uses of data.

“If you’re in a regulated industry, the misuse of information or the dissemination of incorrect information can expose your company to risks that can potentially be fatal in the worst case,” Bean says.

These early stages of a CAIO’s tenure will be spent looking at issues including data security, along with ethics, trust, and responsibility. Regulatory understanding will also be a requirement for a CAIO, because AI-related legislation, while still nascent, will move as rapidly as the technology.

[Read also: In this exclusive interview, trusted AI adviser and former CIO Larry Godec discusses how businesses can cope with AI – and make the most of it]

“You’re going to be living way out in front of this regulation, so there’s really no place to go other than just try to absorb what’s coming through,” says Tiller, adding that a solid working knowledge of current regulation in connected areas like data privacy will be crucial.

Where to find chief AI officers

Companies that want a dedicated CAIO should expect to do a lot of digging, warns Mathison. While building the list for his forthcoming CAIO seminar, he found a lot of people claiming AI expertise who actually had none.

“Way too many AI ‘experts’ are anything but,” agrees Andriole, arguing that CAIOs must have a solid track record in working with AI technologies. “The CAIO should also be able to recruit other experts onto the team, which requires them to have a network of professional friends they can entice into the organization. Such people are few and far between.”

You’ve got to make sure the rest of the board is comfortable with this new person coming in.

Some companies will acquire their expertise. Ad agency WPP installed Daniel Hulme as its CAIO after buying AI company Satalia, where he worked as CEO. Tiller sees many CAIOs coming from tech companies, which are naturally fertile ground for these roles.

However companies find their CAIOs – whether by morphing their CDO role, sourcing someone from the market, or acquiring expertise with a merger – one thing will be paramount: support from the rest of the C-suite. Senior executives must align the CAIO role with their own, providing political support by listening to guidance on AI strategy. They must be willing to commit the necessary resources to support the AI chief’s work – not just in the first quarter, but for the long term.

“You’ve got to make sure the rest of the board is comfortable with this new person coming in,” concludes Mathison. “There can be resistance. But in my opinion, if you’re not on the AI bus, you’re under it.”

TO LEARN MORE

Check out the first-ever Chief AI Officer Summit, organized by the CDO Club and hosted by the Institute for Experiential AI at Northeastern University.

• Who: CAIOs and other AI experts from Dell, Pepsico, Swiss Re, T-Mobile, the U.S. Air Force and the U.S. Army will gather to discuss this burgeoning position in the world of AI.
• When: December 14, 2023
• Where: Boston
• Register: For more details and registration info, click here.