Good morning. Will Daniel here, taking over for Sheryl Estrada today.
AI is already automating increasingly difficult tasks and augmenting humans’ abilities, but soon, experts say it will uncover new miracle cures and make personal robots a reality, enabling a global productivity boom.
I’m sure you’ve heard all this AI hype before—every C-suite executive is certainly aware of AI’s potential to change the world. However, when it comes to the nuts and bolts of how new generative AI tools actually work and the best ways to implement them, it seems many business leaders are behind the ball.
It’s not that executives aren’t implementing AI, they definitely are. Some 54% of CFOs said they plan to use AI to automate tasks previously done by employees in the Richmond Federal Reserve’s May CFO Survey, which features 2,200 execs from across the U.S. And 65% of CFOs said they are actively deploying AI in some capacity in a recent Billtrust survey of 375 U.S. CFOs from various sectors.
The only problem is that only 49% of CFOs told Billtrust they were “very knowledgeable” about Gen AI, and 34% said they believe it will be the next generation of leaders that fully implements it.
The situation is even worse when you begin to talk to CFOs about using AI in finance. Some 58% of CFOs admitted that they understand “very little” about AI in finance in SAP’s January survey of financial leaders, while only 4% said they have a “strong” grasp of the subject.
As SAP’s researchers put it in their report: “CFOs are pushing ahead with deploying AI, but admit their knowledge is highly limited.”
It’s not entirely surprising that there seems to be an AI knowledge gap in the C-suite. After all, that same knowledge gap is evident at all levels of nearly every field as professionals worldwide attempt to catch up with the rapid pace of technological development. But with many CFOs taking charge of rolling out AI tools for their companies, it may be time for a crash course in tech for the C-suite. Certainly it’s a huge selling point if a CFO is “AI forward”—just look at the the recent rise in CFO job postings with AI knowledge requirements.
As Jonathan Marciano, director of communications at the software firm Datarails, told Fortune’s Sheryl Estrada last month: “The future belongs to those CFOs who can seamlessly integrate artificial intelligence with emotional intelligence, forging a new paradigm of finance leadership that is both data-driven and deeply human.”
Will Daniel
will.daniel@fortune.com
Leaderboard
Jamie G. Pierson was named permanent CFO at Forward Air Corporation (Nasdaq: FWRD), effective July 3. Pierson was originally named interim CFO on May 20. Pierson most recently served as CFO of MV Transportation. Before that, he held various senior leadership positions, including EVP and CFO of Ecobat Technologies and YRC Worldwide, Inc.
Vito Culmone was named EVP and CFO at Stantec (NYSE: STN), a sustainable design and engineering company. Culmone will join Stantec in mid-July, and will officially begin his role on Sept. 3. He will succeed Theresa Jang, who previously announced her plan to retire. Culmone brings over 35 years of experience to Stantec.
Big Deal
An S&P Global Market Intelligence analysis finds that private equity and venture capital deal value in real estate plunged to its lowest level since at least 2019. Year to date through May 28, aggregate deal value was $4.88 billion, down from $6.55 billion in the same period in 2023, according to the report.
Going deeper
How Market Power in Repo Financing Leads to Imperfect Competition, a new report in Wharton business journal, explores research by Wharton finance professor Amy Wang Huber, who used a structural model to estimate the difference between what broker-dealers in the repo market pay to the lenders for getting cash and what the dealers charge their customers for using that cash. “Huber showed that dealers’ market power over cash lenders such as money market funds, generates substantial profit for the dealers and affects many downstream asset prices,” according to the report.
Overheard
“Travel and tourism will continue to evolve and grow driven by the human desire to experience and explore. Separately, thoughtfully embracing technologies like AI in a way that enhances the experience of our guests and employees is also a relevant long-term trend for me.”
—Alejandro Reynal, CEO of Four Seasons Hotels and Resorts, told Fortune in an interview.
