Plus: Drafting Your Company's AI Dream Team |
Everyone in business has heard for years that AI can provide a competitive edge, greater efficiency and sizable ROI. But in order to do that, the entire enterprise needs to be ready and able to scale. Accenture recently surveyed 2,000 leading global companies and found there aren’t many at the forefront of the AI transitional race: Only 8% are front-runners that are efficiently scaling AI and embedding it into their core strategy, and just 7% more are deemed “reinvention ready.” The remaining 85% are still experimenting and progressing with AI—important steps, but most are not ready to experience a transformation and all that comes with it. Front-runners, Accenture found, are delivering the most value in many ways. In 2023, these companies saw their revenues grow 7% faster than those that were just experimenting with AI. Their pretax return on invested capital performed 4% better. Stock returns to shareholders were 6% higher. And companies that were AI front-runners also outperformed in less technical areas: promoting inclusion and diversity, skills training, increasing environmental sustainability and creating more value. What are front-runners doing differently? Accenture found they have five imperatives in common. They’re prioritizing AI innovation and growth over cost reduction—with C-suite leaders agreeing on the reasons behind it and how to measure the outcomes. They’re reinventing talent and ways of working, hiring employees who can do more with AI and upskilling existing staff, and giving them more opportunities to learn on the job by experimenting with it. They’re building an AI-enabled digital core, ensuring that their core systems and data are all designed with current and future AI use in mind. They’re using AI responsibly, focusing on governance for its use and risk assessments for both security issues and impacts on the workforce. And they’re also continuously reinventing their strategies and goals, creating a change-management framework that can shift with the way tools are employed, actual results, and changes in technology capabilities and the larger business environment. Another ingredient to AI success is bringing the right people together to work on it. I talked to Krishna Prasad, CIO and chief strategy officer for tech transformation consultant UST, about how to get your AI dream team and move toward a successful deployment. An excerpt from our conversation is later in this newsletter.
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President Donald Trump is on the first trip to the Middle East of his second term, stopping in Saudi Arabia, Qatar and the United Arab Emirates. He’s traveling with a different sort of entourage: One made up of U.S. tech company leaders, who appeared at a Saudi-U.S. Investment Forum. The Washington Post runs down the president’s traveling companions, which include Elon Musk, Amazon CEO Andy Jassy, OpenAI CEO Sam Altman, Nvidia CEO Jensen Huang, AMD CEO Lisa Su, Palantir CEO Alex Karp, venture capitalist Ben Horowitz and Google President and Chief Investment Officer Ruth Porat. (Nobody attended from Meta, Microsoft or Intel, the Post reports, and LinkedIn cofounder Reid Hoffman was listed as an attendee, but did not actually go.) The tech leaders seem to be looking for one of the same things Trump seeks: Investments in U.S. business. Trump announced deals with the U.S. worth hundreds of billions of dollars during his trip, with many going to the tech companies that were with him. These include hundreds of billion dollars for AI data centers and infrastructure in the U.S., plus an agreement for Saudi Arabia’s new state-backed AI company Humain, which Forbes’ Iain Martin writes about, to buy 18,000 AI chips from Nvidia. Elon Musk, who received financing last month from Saudi billionaire Prince Alwaleed Bin Talal Alsaud’s Kingdom Holding Company to refinance part of X’s $12 billion debt, announced a deal this week with Saudi Arabia to offer Starlink satellite internet to the country’s maritime and aviation services, writes Forbes’ John Hyatt. Musk has long received large investments from the Middle East, Hyatt writes, with Kingdom Holding as one of the larger minority investors in Musk’s xAI Holdings. Governments of Qatar, Oman, Kuwait and the U.A.E. have all invested in some of Musk’s companies. |
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Many consultants and analysts have cautioned that while AI can make work more efficient, it cannot reliably replace people. Klarna, the buy-now-pay-later fintech company, announced in 2022 it planned to replace about 10% of its global workforce with AI. Last week, CEO Sebastian Siemiatkowski told Bloomberg that isn’t working as planned, and Klarna is now recruiting human workers to man the customer service lines. Last year, Klarna touted its AI tool that can do the work of 700 customer service reps. “As cost unfortunately seems to have been a too-predominant evaluation factor when organizing this, what you end up having is lower quality,” Siemiatkowski told Bloomberg. “Really investing in the quality of the human support is the way of the future for us.” Siemiatkowski told CNBC this week that use of AI helped the company shrink its headcount by about 40% in two years. But that hasn’t all been AI; the company has had a hiring freeze since 2023. |
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Colorado’s first-in-the-nation sweeping AI regulation law will take effect next year, and despite requests for amendments from Governor Jared Polis when he signed it in 2024, the state’s legislative session adjourned with no changes to the bill—meaning it will go into effect in 2026 as initially passed, writes Forbes senior contributor Alonzo Martinez. The bill was intended to mitigate problems that could come from “algorithmic discrimination,” ensuring that AI systems used in employment, housing, health care, finance and essential government services don’t discriminate against people. In Polis’s letter explaining his approval of the bill, he flagged that the law as written creates a “complex compliance regime,” and he was “concerned about the impact this law may have on an industry that is fueling critical technological advancements.” A bill to make some changes—like defining “algorithmic discrimination” and clarifying rights and disclosures—did not make it out of a legislative committee. Some lawmakers tried to add a one-year delay in implementation to another bill right before the session adjourned, Government Technology reported, but were unsuccessful. What happens next is unclear, though companies doing business in Colorado should start getting ready to comply with the law as it is written. Polis can call a special legislative session later in the year to amend the law. Or the federal government could take the wheel. While efforts to regulate AI in Congress have so far all stalled out, StateScoop reports that the massive budget bill being worked on by House Republicans includes a provision that prohibits states and local governments from passing new laws or enforcing existing ones to regulate AI models or systems until 2035. |
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|  | UST CIO and Chief Strategy Officer Krishna Prasad. UST, Getty |
| How To Find Your Company’s AI Dream Team |
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While the CIO plays an important role in bringing an AI system to an enterprise, they aren’t flying solo: Success comes easier when it’s approached with a team. I talked to Krishna Prasad, CIO and chief strategy officer of transformation consulting business UST, about how to establish that team. This conversation has been edited for length, clarity and continuity. When a company is looking to really establish an AI system, what kinds of skills should they be looking for among the people on the team working on it? Prasad: Depending on which part of the spectrum [the AI deployment is for], the skill needs are quite different. More individual productivity focus, which might be something as simple as Microsoft Copilot or spot applications specific to a function, it’s typically fairly straightforward to enable that, and it requires a little bit more of technical skill to get it going. Then there’s the second part of it, which is helping the user understand how to use it effectively. So you need a little bit of the technology and a little bit of that change management to get people off to the races. If you’re thinking about process efficiency, critical skills to have are: Somebody who has a deep understanding of the business—not just what we do and how we make money, but also the operations of how the business ultimately delivers on its products or services with some level of nuance. Someone who has an understanding of why the processes are the way they are. [Another] skillset that is very key is understanding of the data landscape. You might want to do something different, but you don’t know how to use your data effectively to get there. You can think of it as somebody who’s going and mining, trying to figure out where things are buried that you could use. The whole aspect around security and data privacy is the third element. In today’s environment, doing this completely by yourself is very difficult, so having the right ecosystem partner. It could be a technology product company. It could be the right services partner, but somebody from the broader ecosystem who brings that additional outside-in view to help you on that journey. Is there anything that companies often think they need to bring to AI development that they really don’t? I think it’s a big mistake to approach this purely as cost savings and efficiency, because that’s the only view that you take. No. 1, you’re not leveraging the power. More importantly, you’re not going to get people excited behind it because at the end of the day, they don’t see how it helps them in their careers and their growth as well. One thing that most organizations need to be very careful about is taking a broader view on how AI can transform their business. The best way I’ve seen to do that well is take an outside view: What is my customer looking to do? How can I deliver something that is way better than what I’m doing for them today? And what do I need to do within my organization to help move in that direction? When you bring a customer view, it automatically means growth mindset. When you do a cost view, then it becomes much more of a shrinking pool. How can a CIO convince people with different points of view in the organization that they need to be part of AI planning, and how should the CIO be prepared to shift? The convincing is less about whether AI is going to have an impact on the business. The convincing is really to say we need a well-thought-through approach on how we leverage the power of it. Where there’s a lot of mismanaged expectations is people thinking that it’s a switch: You turn it on and boom, you’re going to get the power of that happening within the company. The CIO needs to be a strong business partner and can no longer just be a technologist. They need to understand what is the core of the business, what differentiates the business in the marketplace, what are the products and services that are offered? Bring all of that to the mix in terms of engaging with the other business leaders. The CIO needs to understand that it requires collective leadership. In the past technology, data and process, were almost independent pieces that had to be brought together. With AI, they’re coming together naturally. It requires a different kind of thinking and a different kind of governance. The CIO needs to play that role: on the one side establishing guardrails, but on the other side, enabling the business to use the power of AI. That requires strong partnership. Establishing an AI council in many companies is how they're thinking about it. Bringing a group together to say: We collectively need to look at this, not from a technology perspective, but how it can impact our business. What are the opportunities? What are the threats? And being able to respond effectively to that. With AI, there is a movement toward citizen development. You’re going to find everybody very easily able to use these tools for doing what they need to do. Now, the role of the CIO as a result is going to shift a little bit to say: How do I manage the risk that could happen to the business as a result of this? But on the other side, how do I also enable my business to use these things without me having to be in the picture all the time? The CIO really needs to shift that mindset of understanding and managing business risk and building innovation on top of that strong business risk framework.
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Insurance firm Unum Group appointed Shelia Anderson as executive vice president and chief information and digital officer. Anderson joins the company after working as executive vice president and chief information officer at Aflac. She is a 2025 CIO 100 Hall of Fame inductee, and a 2024 Top 100 Women in Fintech honoree.
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Mental healthcare company LifeStance Health selected Vaughn Paunovich as chief technology officer, effective June 9. Paunovich, who recently worked in leadership at Amwell and UnitedHealth Group, succeeds Pablo Pantaleoni in the CTO role.
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Send us C-suite transition news at forbescsuite@forbes.com. |
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The corporate environment is changing, and cybersecurity issues have gone from a nuisance to a potential existential threat for companies. Now is the perfect time for CISOs to make their case for being included on company boards, which are likely in need of someone with their expertise. It’s important to have a good strategy for AI implementation, but even the best plans will fail if you don’t have the right corporate culture to make it work. Here are seven ways you can shape your company’s culture for a thriving AI deployment. |
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Meta’s Ray-Ban smart glasses have been on the market for some time, but they may be about to get some competition. Which company is reportedly developing a chip for its own set of smart specs? |
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Microsoft |
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Apple |
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Warby Parker |
D. |
Google |
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Check if you got it right here. |
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