A.I. may have the potential to replace the C-suite, but cultural reasons ensure that the top jobs are secure.

The Potential Rise of AI CEOs: How Close Are We to a Digitally-led Boardroom?

Artificial intelligence (AI) has been making waves in the business world, with the rise of technologies like ChatGPT causing experts to reevaluate the potential impact on various jobs and roles. While many initially believed that CEOs were safe from automation, recent studies have shown a different reality. According to a study by researchers at Princeton University, the University of Pennsylvania, and New York University, chief executive jobs are among the top 12% of positions that could be significantly changed or even eliminated by AI like ChatGPT. This revelation has brought about a shift in perspective, leading to further exploration into the implications of AI in the highest echelons of corporate leadership.

“I think decisions CEOs make will be amenable to machines in the long run,” says Anton Korinek, an economist and professor at the University of Virginia’s Darden Business School. “The trillion-dollar question, of course, is how long that long run is going to be.” The possibility of AI replacing CEOs raises important questions about the future composition of boardrooms and the potential impact on businesses.

The Changing Landscape: C-Suite Vulnerability

Traditionally, concerns about automation focused on lower-skilled physical workers, leaving high-paying white-collar occupations relatively unaffected. However, recent studies suggest that highly educated, highly paid, white-collar occupations, including C-suite positions, may be the most exposed to generative AI. This paradigm shift has caught many by surprise, highlighting the need for a reassessment of the potential impact of AI on executive roles.

“Could AI really eliminate C-suite positions, typically the highest paid jobs in business? In theory, yes,” states Charles Elson, a corporate governance authority. Incorporation laws do not mandate the presence of a CEO or other officers in companies. However, in practice, the C-suite may be more resilient than initially believed. The integration of AI into top-level jobs faces three significant hurdles that need to be overcome.

The Three Hurdles for AI in the C-Suite

1. It Would Have to Do the Whole Job

While AI has the potential to complement C-suite executives, current technology falls short of complete job replacement. As of now, AI may act as a turbocharged assistant, assisting in brainstorming and decision-making. Startups like Inflection.ai offer personal assistants that claim to help individuals with tough decisions and creative ideas. However, the technology is not advanced enough to handle complex tasks such as contract negotiation, employee evaluation, or capital allocation. In order for AI to entirely substitute for human executives, it would need to achieve the capability to perform all these functions.

AI engines are rapidly evolving, doubling their capabilities every three to six months. For example, ChatGPT Plus launched an upgrade that significantly improved performance in exams and included tools like Code Interpreter for complex data analysis. Nevertheless, achieving the level of artificial general intelligence (AGI) where AI systems are generally smarter than humans, as defined by OpenAI’s CEO Sam Altman, remains a considerable challenge. Experts like Geoffrey Hinton, a prominent AI researcher, predict AGI arrival to be anywhere from 5 to 100 years away.

2. It Would Have to Satisfy Regulators

The heavy regulation faced by many industries poses another hurdle for AI in executive roles. Regulated industries, such as financial services and healthcare, require trust and accountability from human executives. Regulators scrutinize certifications, annual reports, and ensure compliance with standards. AI’s ability to satisfy regulators and replace human executives would require its decision-making processes to be transparent and reliable. The recent revelations about ChatGPT’s tendency to “hallucinate” highlight the need for regulatory caution.

3. It Would Have to Satisfy Society

AI’s potential to outperform humans in decision-making may not be sufficient to fully replace human executives. David Wilkins, a Harvard Law School professor, believes that the human qualities valued in top leaders extend beyond reaching correct decisions. Persuasion, motivation, and human connection play a vital role in effective leadership. Even if AI could make better decisions, the societal aspect of feeling heard and valued by a human being may keep human executives in place. The idea of “nostalgic jobs,” where humans are hired simply for being human, might preserve the need for human leadership roles in the C-suite.

Looking into the distant future, if humanoid robots with AGI capabilities become a reality, they may pose a more significant challenge to human executives. However, the actual development and societal acceptance of humanoid robots remain uncertain, making it difficult to predict their potential impact accurately.

The Future of AI in the Boardroom

While AI may have the potential to disrupt the C-suite, it is essential to consider all the factors that currently protect human leadership in the boardroom. The limitations of current AI technology, regulatory requirements, and the inherent human qualities valued in leadership roles provide a robust defense against a complete AI takeover. Nevertheless, as technology continues to advance, a delicate balance between human and AI collaboration in executive roles may be struck.

As Anton Korinek suggests, the long-term future of AI in the CEO position remains uncertain. However, the constant advancements, doubling capabilities, and the pursuit of artificial general intelligence indicate that the rise of AI CEOs might be closer than anticipated. Achieving a digital-led boardroom will require further technological advancements, regulatory adjustments, and a deeper understanding of the societal implications of AI. The role of human executives and their unique capabilities in fostering trust, motivation, and connection within organizations will remain an integral part of business leadership for the foreseeable future.