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Tech leaders prep for the future of AI
Artificial intelligence (AI) is quickly becoming essential to how companies operate. But information and technology leaders know that regulation may be on the horizon. Keeping up with AI policy is no easy task, especially as half of CIOs and CTOs (51%) already cite complying with new legislation and regulations generally as a significant challenge to their business priorities, according to our October 2024 Pulse Survey.
While many tech leaders say AI is widely integrated, companies are still looking to expand its use in customer-facing products and services. CIOs should focus on aligning AI strategies with business goals to drive innovation and efficiency.
As AI adoption grows, so does its energy demand. Incorporating sustainability into AI strategies can not only help reduce environmental impact, it can also help strengthen the company’s long-term resilience.
CIOs are optimistic on AI integration
GenAI might be new, but other forms of AI have been benefiting systems for years. Tech leaders have been on the front lines in helping build AI into their operations. About half (49%) of CIOs now report that AI has been fully integrated into their company’s core business strategy, while 47% say it’s been fully integrated into technology platforms, as well as business processes and workflows.
47% of CIOs say AI is fully integrated into tech, processes and workflows
While this means that AI is widely represented across the systems landscape, it doesn’t mean that CIOs are actively tapping AI’s full potential or extracting meaningful value from their investments. Often, AI is more predominantly deployed in back-office applications. Only about a third (33%) of CIOs report full integration within their product and service offerings.
What you can do
- Increase efficiency behind the scenes. Back-office changes can be a low-risk, high-reward area for your AI investments. Focus future integrations in areas where they can expedite tasks and free up employees for more complex, higher-value tasks.
- Fire up your innovation agenda. Focus on using AI tools to create new value in your products and services while continuing to optimize the back office. This can help improve customer experience and help you stay ahead of the competition.
Tech leaders’ biggest challenges right now
CIOs and CTOs see a number of challenges getting in the way of achieving their priorities. The swirl around the election is adding complexity. Fifty-one percent of tech leaders say that complying with new legislation and regulations generally is a significant challenge (the highest response).
51% percent of CIOs say that complying with new legislation and regulations is a significant challenge
With new capabilities — and vulnerabilities — debuting seemingly daily, it’s no wonder they are also thinking about AI. Nearly half (47%) of CIOs also rate keeping up with the expansion of AI policy and standards as a significant challenge. The growing complexity of these regulations underscores the seriousness of AI-related risks, which are becoming a critical concern for organizations. More than two thirds, 68%, of CIOs cite AI legal and reputational risks as a moderate or serious risk to their company.
Half also labeled talent acquisition and retention a significant challenge. As AI changes the way businesses operate, maintaining a workforce with the skills and experience needed to use these new tools and processes will remain critical.
What you can do
- Don’t go at it alone. Every industry has trade associations. Take an active role in helping craft future policies and regulations by working with your peers and legislators to create standard practices and protections.
- Take proactive ownership. Organizations should establish Responsible AI guidelines early to direct and manage their long-term AI development.
The sustainability of AI
Despite its efficiency, CIOs know that AI requires significant computational power and data. They’re keenly aware of the huge energy draw of new data centers, often generated from nonrenewable sources. Technology leaders are paying careful attention to how new and existing investments, especially in AI, are affecting their carbon footprint. They’re also thinking about their company’s energy strategies in this context.
42% of CIOs are transitioning data centers to renewable energy
One in three (33%) say they fully integrate both AI’s power consumption and IT’s overall carbon footprint into their strategy. And even more (42%) say they’re transitioning their data centers to renewable energy. CIOs find themselves at an intersection of technology and sustainability. In fact, 73% of CIOs cite climate change as either a moderate or serious risk to their company — compared to 64% of all executives. Focusing on sustainability can not only help reduce environmental impact, it can help boost the company’s long-term resilience.
CIOs find themselves at an intersection of technology and sustainability. In fact, 73% of CIOs cite climate change as either a moderate or serious risk to their company — compared to 64% of all executives. Focusing on sustainability can not only help reduce environmental impact, it can help boost the company’s long-term resilience.
What you can do
Collaborate with your C-suite colleagues. As AI capabilities continue to grow, work across the C-suite to determine projected growth and demand in terms of computing and, indirectly, power consumption. How will you meet that demand in a sustainable way?
Check in with your cloud service providers. Just because they’re the providers doesn’t mean you’re off the hook. Look at how their sustainability efforts may affect your data needs and costs.
When in doubt, carbon credits. If renewable energy options are scarce where your data centers sit, explore buying carbon credits.
Get access to the complete survey responses and data
View the main Pulse survey
Executive takes on Election 2024
About the survey
Our latest PwC Pulse Survey, fielded September 12 and September 19, 2024 surveyed 709 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 78 were CIOs.
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