Almost half of Australian organisations have appointed a Chief AI Officer (CAIO), with nearly two-thirds expected to have the role in place by 2027, according to a new report from Datacom.
The report, The Emerging Role of the Chief AI Officer in Australia: Building Leadership for Transformation, surveyed 507 business and IT leaders. It found that 63% of organisations expect to have a CAIO within the next year as AI adoption accelerates.
AI leadership moves into the C-suite
The findings suggest Australian organisations are formalising AI leadership as adoption moves beyond experimentation.
More than four in 10 organisations are now scaling AI across multiple business functions. Just 3% said they are not using AI at all.
Despite the momentum, 55% of organisations described themselves as cautious or highly risk-averse. Risk and governance concerns were identified as the biggest barrier to stronger AI leadership, cited by 22% of respondents.
The report also found that 93% expect the CAIO role to become a permanent part of the executive team.
Strategy and governance take priority
The research shows organisations increasingly see the CAIO as a business leader rather than a technology executive.
Developing an AI strategy and roadmap ranked as the role's top responsibility, cited by 60% of respondents. Responsible AI governance followed at 50%.
By comparison, only 9% viewed managing vendors and platforms as a key responsibility, signalling a shift away from the role being seen as primarily technical.
Lou Compagnone, Director of Artificial Intelligence at Datacom Australia said, "Many organisations initially viewed AI as a technology initiative owned by CIOs or CTOs. However, as adoption expands across the business, organisations are recognising the need for dedicated leadership to oversee the implementation, risk management and governance of AI across the organisation."
"CAIOs might not have a technical background, with the main elements of the job focused on transformation, communication and innovation, ensuring organisations understand the shifts that are happening and that where is a plan to move forward,” she added.
Productivity drives AI investment
Improving productivity remains the biggest reason organisations are investing in AI.
Around 38% of respondents said productivity was the primary driver of AI adoption as businesses seek greater efficiency and competitiveness.
Executive support also emerged as a critical success factor. Nearly half (47%) said leadership backing is essential to delivering meaningful AI outcomes.
Compagnone quoted, "Technology alone won't determine whether organisations succeed with AI. Without leadership teams on side, even the most sophisticated AI initiatives risk becoming just a box-ticking exercise or stalling."
Government mandate accelerates adoption
Compagnone concluded, "While many assume government lags on technology, the public sector is taking a leadership role in AI governance. The way departments approach the CAIO role today will shape expectations for AI leadership across both the public and private sectors in the years ahead.”
The Australian public sector is leading the adoption of Chief AI Officers.
Nearly three-quarters (73%) of respondents said the government requirement has shaped their organisation's approach to AI leadership.
Since July, all Australian Government departments and agencies have been required to appoint a CAIO. The mandate is also influencing private sector organisations.