Can AI Replace Your CEO? The Looming Reality
As artificial intelligence programs disrupt the workforce, potentially rendering millions of jobs obsolete, one particular group of highly stressed workers appears especially at risk.
These employees, who analyze new markets and identify trends, perform tasks that a computer could execute more efficiently. They spend considerable time communicating with colleagues, an activity increasingly automated through voice and image generators. When it comes to making difficult decisions, machines excel at remaining impartial.
Moreover, these roles are highly compensated, making the cost savings from their elimination significant.
CEOs, like writers of press releases and customer service representatives, face growing threats from AI. Dark factories, which are fully automated, may soon have their equivalent in corporate leadership: dark suites.
This is not mere speculation. Some successful companies have begun experimenting with AI leadership, although it may currently serve more as a branding exercise.
Since the launch of OpenAI’s ChatGPT in November 2022, AI has been heralded as a solution to all corporate challenges. Silicon Valley invested $29 billion in generative AI last year and is aggressively promoting it. Even in its nascent form, AI that mimics human reasoning is gaining traction among struggling companies with little to lose and weak leadership.
“In struggling companies, operational management will be the first to be replaced, though a few humans will likely remain to think beyond the machines,” said Saul J. Berman, a former senior consulting partner at IBM. “The changes wrought by AI in corporations will be as significant, if not more so, at the higher strategic levels of management as at the lower ranks.”
CEOs themselves seem either enthusiastic or resigned about this prospect.
EdX, an online learning platform created by Harvard University and MIT administrators and now part of publicly traded 2U Inc., surveyed hundreds of CEOs and executives last summer on this topic. Participants were offered a small monetary incentive to participate.
The results were striking. Nearly half—47%—of the executives surveyed believed that most or all of the CEO role could be completely automated or replaced by AI. Even executives see themselves as expendable in the digital age.
Anant Agarwal, the founder of edX and a former director of MIT’s Computer Science and AI Lab, was initially surprised by the 47% figure. “My first instinct was that they would say, ‘Replace all the employees but not me,’” he said. “But on deeper reflection, I realized that 80% of a CEO’s work could be done by AI.”
This includes writing, synthesizing information, and motivating employees. If AI lives up to its promise, it will democratize top management while simultaneously scaling it back.
“There used to be a divide between those who were numerically skilled and those who were not,” Agarwal noted. “The calculator was the great equalizer. I believe AI will similarly equalize literacy, making anyone capable of being a CEO.”
The idea of working for robots has long been a theme in popular culture. Perhaps the first use of the term “robot-boss” was in a 1939 story by David C. Cooke in the pulp magazine Science Fiction. The tale was far from a positive portrayal of mentorship and support.
“Remember,” the robot-boss warns, “my photon gun will shoot faster than you can run, so don’t try to escape.”
Many subsequent science fiction stories and films have depicted the human-machine relationship in equally bleak terms. Nonetheless, real people seem oddly attracted to the idea. A 2017 survey of 1,000 British workers, commissioned by an online accounting firm, found that 42% would be “comfortable” taking orders from a computer.
Long before the current AI boom, Jack Ma, then CEO of Chinese e-commerce giant Alibaba, predicted that within 30 years, “a robot will likely be on the cover of Time magazine as the best CEO.” He noted that robots are faster and more rational than humans and are not driven by emotions like anger.
Chinese online game company NetDragon Websoft, which employs 5,000 people, appointed an “AI-driven rotating CEO” named Tang Yu in 2022. “We believe AI is the future of corporate management,” said founder Dejian Liu, adding that it was part of NetDragon’s move into a “metaverse-based working community.”
Tang Yu, personified as a woman, does not appear on NetDragon’s online management team chart, but the company recently announced that she had won the title of “China’s Best Virtual Employee of the Year” at the China Digital Human Industry Forum. Another executive accepted the award on her behalf. NetDragon says its AI employee team handles performance evaluations and mentoring, among other duties.
In another part of the world, upscale Polish rum company Dictador announced in November that it had an AI humanoid CEO named Mika. Mika declared on LinkedIn that she was “devoid of personal bias, ensuring unbiased and strategic choices that prioritize the organization’s best interests.”
The National Association of Chief Executive Officers might have opinions on this trend—if only to refute it—but its website does not list any actual human members. A message sent through a “contact us” prompt received no reply.
Human AI experts caution that we are at the beginning of this transition, but see it as a natural progression. “We’ve always outsourced effort. Now we’re outsourcing intelligence,” said Vinay Menon, who leads the global AI practice at consulting firm Korn Ferry. He warned, however, that “while you may not need the same number of leaders, you will still need leadership.”
Humans provide accountability in a way that machines cannot. “AI might be used as a way to shield people from taking fiduciary responsibility,” said Sean Earley, managing director at executive consulting firm Teneo. “At what point does it become responsible for a mistake?”
One company recently argued in court that it could never be held liable for its AI’s errors. A customer sued Air Canada after being denied a bereavement fare reduction promised by a chatbot on the airline’s website. The customer took his case to a small claims tribunal. Air Canada defended itself by arguing that it could not be held responsible for information provided by one of its agents, representatives, or chatbots.
In February, the judge ruled against the airline and in favor of the passenger. However, the prospect of a company arguing that its own AI could not be trusted did not bode well for AI management teams. Air Canada declined to comment.
Much of the discussion over the past year about AI in the workplace has focused on the risks to rank-and-file employees unless they incorporate new technology into their jobs—without, of course, letting their jobs become AI. Automation has historically put workers at risk while benefiting investors and managers.
Now, the tables may be turning. Researchers speculate that executive-level automation could benefit lower-level workers. “Someone already advanced in their career and self-motivated may not need a human boss anymore,” said Phoebe V. Moore, a professor at the University of Essex Business School. “In that case, self-management software could enhance worker autonomy.”
The pandemic prepared people for this shift. Many office workers began working from home in 2020, and many continue to do so at least part-time. Communication with colleagues and executives is now done through machines. The next step could be communicating with a machine that has no human at the other end.
FAQs
Can AI fully replace a CEO?
While AI can perform many tasks associated with a CEO, it currently lacks the emotional intelligence and ethical considerations that are crucial for effective leadership. A hybrid approach, combining AI with human oversight, may be the most effective solution.
What are the main advantages of AI CEOs?
AI CEOs can enhance efficiency, reduce costs, and make impartial decisions. They can work continuously without fatigue and provide data-driven insights that improve decision-making processes.
Are there any companies successfully using AI in leadership roles?
Yes, companies like NetDragon Websoft and Dictador have experimented with AI in leadership roles. These initiatives are still in the early stages, but they provide valuable insights into the potential of AI in executive positions.
What skills should employees focus on to stay relevant?
Employees should focus on developing skills that complement AI, such as creativity, emotional intelligence, and strategic thinking. Adaptability and continuous learning will be crucial in an AI-driven future.
How can companies prepare for an AI-driven future?
Companies should invest in training programs to help employees adapt to new technologies. They should also develop robust regulatory frameworks to ensure that AI operates within ethical and legal boundaries. Embracing a hybrid approach, where AI and human intelligence work together, will be key to success.