Why are companies rushing to appoint Chief AI Officer

Accenture Federal Services, an Accenture subsidiary and leading US federal services company, appointed its first chief artificial intelligence officer (CAIO) on Thursday. Denise Zheng, who was earlier the company’s head of global generative AI and ecosystem, will now lead AI tools development, create the ethical framework, and build teams and partnerships as the newly appointed CAIO. 

To be sure, parent Accenture, which boosted a $450 million worth of generative AI projects pipeline in the first quarter alone, appointed a CAIO back in September. The company's CAIO Lan Guan said in an interview with Fortune that one of her mandates would be to double the AI workforce to 80,000.

CAIO has emerged as the hot job of the season. Along with Accenture, companies like SAP, Thoughtworks, Fractal Analytics, and Analog Devices have appointed CAIOs. While there are no official numbers on how companies have CAIOs, Kapil Joshi, the deputy chief executive officer (CEO) of Quess IT Staffing, informed TechCircle that preliminary estimates indicate that the global count could be in double digits.

Who is a CAIO

A CAIO is a C-suite executive whose responsibilities include driving the organization's overall AI strategy, aligning it with business objectives, and ensuring that AI initiatives create value and deliver measurable results. While largely a business role, the person at the helm of this position is expected to have a background in data and AI technologies. Being a C-suite, the CAIO usually has a direct reporting line to the company CEO. 

“The CAIO position is a relatively new addition to the C-suite, reflecting the growing importance of AI in driving innovation, operational efficiency, and competitive advantage across various industries,” Sachin Panicker, CAIO at digital engineering company Fulcrum Digital told TechCircle in an earlier interview. To be sure, a Nasscom-Avasant joint report in April reported that CAIO, along with roles like generative AI developer, prompt engineer, AI model curator, and AI content creator will see increased demand in 2024.

“At this point, I think there are two main reasons why companies may be hiring CAIOs. First is that it is symbolic – it is important to have a C-level executive at the helm for the board to understand that it is a business-shifting technology. Secondly, it is also important that the companies build their own internal capability in AI to build confidence in their customers – an eat your own dog food scenario,” said Jaspreet Bindra, founder of Tech Whisperer, a UK-based advisory firm. He further adds that once AI is completely incorporated into the fabric of tech companies, a separate CAIO role will no longer be required. 

Need for CAIO

A Gartner report in December questioned if it is too soon to appoint CAIOs. Elaborating further, Gartner Distinguished VP Analyst, Frances Karamouzis, who is also one of the report authors told TechCircle that the role of CAIO is going to take many years to be even established – if at all. 

“The role is performing the function of orchestrating activities such as strategizing, vetting the ideas, prioritizing them, and making recommendations on which of them should be funded. Additionally, aspects such as governance, policy-making, risk identification, and costing of the model also come into play. So that's why there is a need for someone to orchestrate those things. But the person doesn't have to have the auspicious title of a CAIO,” Karamouzis said. She further adds that each time there is a new era of technology, a C-Suite role is not necessarily warranted right away. 

“A seat at the C-suite level takes years to build up to, embrace, and justify,” the Gartner report said. It instead suggests appointing a head of AI – a single person who combines business and technology leadership and is responsible for AI orchestration.

Data from staffing firm, foundIt, shared with TechCircle, shows that sectors such as IT, BFSI, consulting, education, KPO, research and analytics in India have been at the forefront of hiring senior management roles related to AI. The trend is most evident in IT, the sector which has the largest share of AI-related job roles (17%). Further, AI jobs have increased from 40,000 in 2018 to over 190,000 in 2023. “From 2018 to 2023, there is a consistent upward trend in the number of AI jobs, demonstrating the increasing importance of AI in various sectors. While there has been steady growth in AI jobs in the earlier years, there is a notable acceleration in growth from 2020 onwards,” the finding said.