The Elevated Status of CIOs Amid the AI Boom... Private Meetings with CEOs

The status of Chief Information Officers (CIOs), one of the executive ranks in companies, appears to be rising amid the AI development boom across all industries.

On the 12th (local time), the U.S. Wall Street Journal (WSJ) reported, "More and more CIOs have started reporting directly to Chief Executive Officers (CEOs)," adding, "This reflects the increased importance of the role in establishing AI strategies as companies move to avoid falling behind in the AI race."

CIOs are heads of information technology systems departments within companies, including data centers and cloud computing. They have traditionally been considered less powerful within the company than Chief Financial Officers (CFOs), who manage the flow of corporate funds. However, as corporate AI strategies have become critical to the long-term future of companies, businesses have begun to empower CIOs with greater business leadership authority.

There is survey data showing the rise in CIOs' internal power. According to Deloitte's "Global Tech Leader" survey conducted in February, the proportion of U.S. company CIOs reporting directly to CEOs last year was 52%, up from 41% in 2015. Deloitte analyzed that the increased frequency of one-on-one meetings with CEOs, who represent the "face of the company," indicates a rise in decision-making power within the company.

On the other hand, during the same period, the proportion of CIOs reporting directly to CFOs dropped sharply from 26% to 12%. The structure where CIOs report directly to CFOs is generally associated with the concept of IT department cost expenditures (depreciation). WSJ reported, "In the past, IT departments funded themselves through internal budgets, but now some CEOs and boards allocate funds exclusively for AI," reflecting the changed atmosphere.

Deloitte's Lu DiLorenzo Jr. stated, "Since OpenAI launched the ChatGPT chatbot in 2022, corporate interest in generative AI has surged from the end of that year," adding, "CIOs now have the opportunity to lead their organizations."

Lisa Davis, CIO of Blue Shield, an insurance company based in California, emphasized in an interview with WSJ that she felt the elevated status of CIOs. She said, "I have been able to participate directly in conversations with the CEO regarding business restructuring, which has allowed technology modernization projects to proceed more quickly," adding, "This would never have happened if the IT department had remained in the back office."