Power up. From supercharging employee productivity and streamlining processes to inspiring innovation, Microsoft’s AI is designed to help you build the next big thing. No matter where you're starting, push what's possible and build your way with Azure's industry-leading AI. Check it out.
Almost every company these days is AI-curious. Growing numbers are also AI-ready. But only a handful of CEOs have had the audacity—and perhaps the chronic LinkedIn habit—to publicly declare their companies “AI-first.”
Duolingo, Shopify, and Box are among the companies that made waves with memos in which their CEOs laid out a vision for an “AI-first” future. (Shopify didn’t use this exact term, but the sentiment’s there.) These documents detail how AI will transform operations, employee expectations, and overall strategy going forward.
In Shopify and Duolingo’s case, the declarations have grabbed the most attention for their somewhat mask-off quality. While most executives are careful to say that AI is supplementing rather than replacing their workers, Shopify CEO Tobias Lütke was up-front about only expanding headcount when AI won’t suffice. Duolingo CEO Luis von Ahn admitted his company will “gradually stop using contractors to do work that Al can handle.”
The why: Naturally, this led to some backlash, especially toward Duolingo. But Gartner distinguished VP analyst Arun Chandrasekaran told us the public at large isn’t necessarily the only audience for these moves. The execs might be more concerned with sending a message to investors—and employees—that they’re serious about this technology, he said.
“It’s a way to signal to the investors that we’re not going to be lagging behind. We want to be the disruptor, we don’t want to be the disrupted one,” Chandrasekaran said. “It’s also a signal to their own employees that this is going to come fast and furious, and you’ve got to be ready for this journey.”
Adam Brotman, who helps guide companies through digital transformations as co-CEO and co-founder of consulting firm Forum3, said the announcements could also be—maybe ironically—about the types of human hires they want to make.
“They want to attract the kind of people and retain the kind of people that are forward-thinking,” Brotman told us. “My guess is that that goes into the thought process as well.”
Richard Socher, CEO and founder of AI enterprise tools startup You.com and former chief scientist at Salesforce, said there’s also plenty of competitive pressure in the market driving these decisions.
“Shopify is under a huge attack from companies like Lovable,” Socher told us. “You see that wave coming and you have to adapt.”
Reputational risks: But companies need to weigh the decision to plant such a stake in the ground carefully, Chandrasekaran said. For one, they need to actually have the AI prowess to back it up. If a company declares itself “AI-first” and then you have a “subpar experience” with its AI customer agent, it’s going to show a gap between ambition and capabilities, he said.
Klarna caused a big stir when it declared last year that it had paused all hiring as AI replaced workers, especially customer service agents. In an interview with Bloomberg this month, CEO Sebastian Siemiatkowski said the company is backtracking and preparing for a hiring spree to ensure it has live representatives.
Duolingo has faced online criticism for its pledge to replace contract workers, in the form of angry social media posts and a flood of one-star reviews.
“CEOs cannot be knee-jerkish and tone-deaf in terms of how they message this to the market,” Chandrasekaran said. “They have to think about the social implications of this. They have to think about the brand implications. And they also have to really think about the human implications, both outside and inside the company.”
Brotman said companies need to be careful to make clear that AI-first is an approach to technology and not about replacing humans.
“It can be construed as opposed to human-first, which is not really what it means, in my opinion. I’m old enough to remember “digital-first” and “mobile-first,” and they weren’t anti-human,” he said. “There’s something about AI, for good reason, that causes people to be fearful and skeptical.”
First to go first: As for whether other companies will follow suit, Brotman said most CEOs his firm talks to are not yet in a position to make pronouncements like these. “[They] are still trying to get their head around what this technology is and how they should even be thinking about it,” he said.
Many companies are thinking along these lines in private, but not as open about declaring a big public vision, according to Chandrasekaran.
There could also be only a short window of time before this sort of “AI-first” thinking is taken for granted, according to Brotman, who previously served as the first chief digital officer of Starbucks.
“At some point it just becomes table stakes to be AI first,” he said. “It’s possible that there’s not going to be a need for these kinds of memos by this time next year…you’ll almost be feeling a little silly if you’re saying you’re AI-first.”