The Morning Download: CEOs Are Leading AI Adoption

What's up: Job reports return; OpenAI to end ‘vesting cliff’; Roomba maker declares bankruptcy.

Good morning. A new survey drives home one of the defining characteristics of artificial-intelligence adoption in business. It’s coming from the very top, with chief executives giving their companies the latitude to keep investing, even if the returns aren’t apparent right away.

From The Wall Street Journal on Sunday: Chief executives of some of the world’s largest companies are all-in on artificial intelligence, according to an annual survey of more than 350 public-company CEOs from advisory firm Teneo.

Other findings.

• Less than half of current AI projects had generated more in returns than they had cost, respondents said.
• 67% of CEOs believe AI will increase their entry-level head count, while 58% believe AI will increase senior leadership head count.

It’s the second poll this month to make that point. The WSJ Leadership Institute reported Dec. 9 that 85% of chief executives believe AI is entering a healthy growth phase rather than a bubble, according to research from global marketing network Stagwell.

“What I saw in this poll…is unbridled enthusiasm for AI,” said Stagwell Chairman and Chief Executive Mark Penn, a former Microsoft chief strategist and presidential pollster and strategist. Ninety-five percent of CEO respondents said AI would be transformative, while 5% viewed it as overhyped, Penn said at The Wall Street Journal CEO Council Summit in Washington.

The question is why the majority of CEOs are bullish on AI when many investors are getting nervous.

Part of the answer is that many businesses, and large companies in particular, seem to have a longer investment horizon and a different view of risk than investors in the public markets. In that respect, they are thinking more like venture-capital investors, who make big bets and are willing to wait years for a return on their investment.

The difference between VC investors and CEOs is that venture-capital funds make numerous investments, spreading that risk around. There’s a good chance that a particular portfolio company will underperform or fail, but they don’t bet the entire fund on one company. They share their risk with co-investors and limited partners.

CEOs are potentially betting the company on their technology investment decisions. Every single time. If their biggest bets don’t pan out, they stand to waste precious capital. If they sit out a crucial technology shift, they risk being run over by the steamroller of history.

And even if most companies aren’t seeing a sufficient return on AI right now, a good number of them are.

“It’s very, very hard to build an agentic framework,” Leigh-Ann Russell, chief information officer and global head of engineering at financial services provider BNY, told me recently. “But we have 117 solutions [including agentic] touching everything that happens at the bank and we’re seeing really, really tangible outcomes that impact our bottom line in terms of growing capacity.”

Is your company seeing a return on its investments in AI? Use the links at the end of this newsletter and let us know how it’s going.

The Labor Department, after pausing its data collection for weeks during the government shutdown, on Tuesday will publish a report with two months’ worth of data on the health of the U.S. job market, WSJ reports.

The report will reveal the unemployment rate for November and some data on hiring in October and could help shed more light on the impact of tariff policies, rising costs and AI on hiring. 

More on AI and hiring below.

OpenAI ended one policy requiring employees to work at the company for at least six months before their equity vests.

The change to the “vesting cliff,” announced by applications chief Fidji Simo, is designed to encourage new employees to take risks without fear of being let go before accessing their first chunk of equity, according to people familiar with the matter.

The company expects to spend $6 billion this year on stock-based compensation—almost half of its projected revenue—the Journal reports. Tech investors have privately complained about the ballooning stock-based compensation associated with AI startups, arguing that it eats into shareholder returns.

Machines that show their work could help overcome inherent distrust.

AI industry professionals are discovering that even as their decision-making systems get better and better—in many cases out-performing humans—public trust in them is not necessarily following suit, WSJ tech columnist Christopher Mims reports. 

"For those asking the public to trust their AIs, it doesn’t help that systems based on related technology are causing harm in ways all of us hear about daily, from suicide-encouraging chatbots to image generators that devour jobs and intellectual property."