C-suite enthusiasm over generative AI wanes, putting pressure on quick wins

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Dive Brief:

  • While organizations are set to invest more in AI, enthusiasm over generative AI applications is beginning to wane among senior executives and boards of directors according to a Deloitte report published Tuesday.
  • Interest in the technology fell 11 percentage points among senior executives and eight percentage points among board of directors, respectively, since Deloitte’s Q1 2024 survey.
  • The majority of CIOs have moved less than one-third of experiments to production, and only 23% of tech leaders describe their organization as highly prepared to address risk management and governance challenges, according to the survey of 2,770 IT decision-makers.

Dive Insight:

CIOs are playing a leading role in setting the business up for success with generative AI plans. Among the actions critical to progress, navigating costs, ROI and tech debt challenges have risen in importance. 

As interest in generative AI soared, tech leaders were inundated with use case ideas brought forth by team members and employees. But not every use case matches an organization’s risk tolerance and tech maturity. 

“Many organizations are learning through experience that large-scale generative AI deployment can be a difficult and multifaceted challenge,” Deloitte said in the report. “As with a lot of digital transformation efforts, projects can fail or struggle for a variety of reasons.”

Knowing when — and where — to move forward is a collaborative process. 

Senior tech decision-makers have grown closer to their executive counterparts as AI plans have percolated through different business units, collaborating with CFOs, HR leaders and legal and compliance chiefs. 

While ROI struggles remain, two-thirds of surveyed organizations credit the decision to increase investments in generative AI to the “strong early value to date,” according to the Deloitte survey. 

Tech leaders have had concerns about moving too fast or too slow when deploying generative AI. but most are working to align the pace of adoption with the business goals. Hitting that speed requires clear governance, guidance and some future-proofing. 

Around half of organizations said they are preparing regulatory forecasts or assessments to mitigate uncertainty, according to the Deloitte survey. As tech leaders assess the impact of tightening regulations, they are also anticipating compliance efforts will bring higher costs. 

CIOs are weighing the effects of the European Union’s AI Act, which went into force Aug. 1 in a phased two-year transitional period. In the U.S., Colorado enacted AI rules in June and California’s proposed state Senate Bill 1047 continues to advance through the legislative process. 

CIOs have kept track of regulatory moves on AI even with their busy agenda.

“I have to stay prepared because, eventually, it’s going to make it to the other states,” Shohreh Abedi, EVP and chief operations and technology officer and membership experience at AAA – The Auto Club Group, told CIO Dive.

The organization tapped Salesforce as part of its generative AI push last year and has since adopted Salesforce’s AI cloud and Einstein Copilot, which has led to sales increases and productivity boosts, Abedi told CIO Dive. 

AAA’s second-largest North America club serves more than 13 million members across 14 states, the province of Quebec, Puerto Rico and the U.S. Virgin Islands. 

“We can’t put our head in the sand,” Abedi said.