Nobody is curbing artificial intelligence spending, either.
In a remarkably unified front, nine of ten chief financial officers say they’re planning higher artificial intelligence budgets for the remainder of the year. Seven out of ten corporate finance heads say they’ll boost their AI spending by at least 10% over the same period.
What’s more, no CFO is cutting their AI budget this year.
That’s the outlook from a new Gartner study of 302 U.S. CFOs that spotlighted AI funding strategies in 2024.
“As organizations venture further down the AI path, executives must agree on their ultimate goals for the use of this technology,” said Alexander Bant, research director at Gartner Finance. “CFOs should complement increased spending on AI with critical C-suite discussions about the organization’s AI ambition.”
Bant noted that CFOs pumping out more cash for technology in 2024 shouldn’t do so in a vacuum.
“As AI spending increases, CFOs have a unique role to play both in determining how it will impact finance department structure and – given their holistic understanding of core business value drivers that this technology could put at risk – in establishing proper enterprise-wide governance that balances opportunity and oversight,” added Bant.
To ensure AI funds are spent wisely, CFOs should work with the C-suite to establish an organization’s vision for the technology.
“Establishing an AI vision means working out whether the organization will use AI to improve existing business or operating models or to go further and create fundamentally new ones,” said Bant. “Moreover, it means deciding whether AI will be an internal operations tool or something facing external customers.”
FOMO is For Real
Those same CFOs are likely reading the tea leaves and acknowledging they don’t want to be left behind by their competitors on the artificial intelligence front.
Microsoft recently reported that “for every $1 a company invests in AI, it realizes an average return of $3.5 X,” with more aggressive organizations realizing $8X.”
Consequently, ignoring or downplaying company AI investments versus companies that become “more agile” are missing out on those earnings while AI-powered competitors are stacking cash, Microsoft said.
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
