AI is changing the role of the CEO — and it could lead to a change of command
When Microsoft CEO Satya Nadella told employees in October that he was stepping down from running the technology company’s commercial business, he said he was doing so to increase his focus on Microsoft’s technology work — and, very specifically, AI. Nadella explained that Microsoft’s continued success would depend on empowering customers with new artificial intelligence skills to make it “the partner of choice for AI transformation.”
With this gesture, the 58-year-old executive, whose 12 years in the top job are an eternity by the standards of Fortune 500 companies, signaled that the dominance of AI was non-negotiable. During Nadella’s extremely successful tenure, shares appreciated 11 times and Microsoft joined the tiny group of companies valued at more than US$3 trillion. But you won’t remain relevant or effective if you don’t stay on top of AI and how it’s changing your industry — and the same goes for your peers in any industry.
Also read: Alert to CEOs: their companies were designed for a world that no longer exists
This new reality takes shape as several of Silicon Valley’s best-known CEOs extend their tenures into a second decade. Among them are Sundar Pichai, 53 years old (10 years at Google, six years at the helm of its most recently created parent company, Alphabet), and Tim Cook, 65 years old, at Apple (14 years as CEO). It’s becoming increasingly clear that AI will play a major role in determining how long these CEOs stay at the top.
But in other areas of technology, and across the Fortune 500, such long tenures are likely to become increasingly rare — at least during the first waves of the AI boom. In fact, the numbers have already started to shrink.
The global average CEO tenure has fallen to 7.2 years, below the peak of 8.4 years recorded in 2021 and 2023, according to leadership consultancy Russell Reynolds. (Tech CEO tenures are more or less in line with the overall market average.)
And that average will likely continue to fall for a few years. The consultancy assumes this is because boards are closely monitoring the effectiveness of CEOs and whether they respond to changes with precision and adaptability — factors that AI has brought to the center of the debate. And these boards act more quickly when performance falls short of expectations.
“What we’re seeing across the board is a desire for CEOs who bring more of a beginner’s mindset and adaptability.”
In addition to generating more turnover, broader adoption of AI could also change the demographics of the CEO pool. Industry observers expect the next wave of CEOs to be younger as boards seek AI-fluent leaders.
And CEOs may also need youth — or at least youthfulness — to help ward off burnout as AI accelerates the pace of change within companies.
“Between the compression of the disruption cycle and the inherent risk, the expectation from boards of CEOs is that you be an AI native,” says Chad Hesters, CEO of executive recruiting firm Boyden. “You need to understand that, and you need to understand that this is not a gradual change.”
It is no coincidence that longevity and success in AI have gone hand in hand in big tech. Nadella, who comes from a product background, has paved the way and shown other longtime CEOs how to recognize and address the rise of AI: Microsoft’s early investment in OpenAI and the integration of ChatGPT into the Azure cloud business are hallmarks of his tenure.
Pichai, in turn, transformed Google from a laggard in generative AI into a major threat to ChatGPT, by OpenAI CEO Sam Altman’s own admission. Pichai has engaged the company with an “AI-first” strategy, placing machine learning at the heart of Google’s products, research and infrastructure and ensuring that AI is never just an add-on.
As for Apple, many critics say that under Cook, the company has fallen behind in the AI race. Several senior leaders left the company in the fourth quarter of 2025, and there is considerable speculation that Cook may be preparing to exit the scene. (Apple declined to comment on reports of this speculation.)
Shorter horizons
The rise of AI has coincided with shrinking CEO tenure as leaders race to adapt.
Although they are veterans by relatively young technology standards, Nadella and Pichai have figured out how to navigate a technology that is changing the way businesses operate. It’s not about the purely technical AI skills a computer scientist might have, but about familiarity with AI and understanding how it can help them — and the companies they lead — compete.
After all, the work of a technology CEO is almost never focused on programming and the technical details of AI, or any other technology, but rather on taking a global view and designing and implementing strategy.
The role also requires the perspective that comes with experience, to better understand the nuances of the changes that AI can bring to other elements of the business, such as privacy and data security.
Still, the urgency for CEOs to have AI-oriented sensibilities is far from limited to technology companies. In fact, all sectors are likely to be transformed by AI.
In retail, AI will radically change business pillars like customer surveys and inventory management, while airlines will use it for crucial tasks like optimally rescheduling flights in the event of heavy snowfall or predicting aircraft component failures.
When Walmart and Target recently introduced new CEOs — John Furner and Michael Fiddelke, respectively — both retailers highlighted the executives’ familiarity with AI, a technology that is already changing the way their customers shop. (Walmart recently moved its stock listing from the NYSE to the Nasdaq to make its technology focus clear.)
In aviation, Delta Air Lines CEO Ed Bastian launched a generative AI travel assistant earlier this year, while United Airlines’ Scott Kirby said in June that his company “is probably doing more AI than anyone else.”
Companies certainly believe that investors care: a December FactSet report found that in the most recent quarterly earnings season, the term “AI” was mentioned in 306 earnings calls held by S&P 500 companies, well above the five-year average of 136 mentions.
That said, older CEOs of technology companies and traditional industries don’t necessarily need to worry that they lack the time or aptitude to become AI insiders. They can survive — and even thrive — on the AI wave as long as they demonstrate intellectual curiosity and adaptability, says Jason Baumgarten, a partner at leadership consultancy Spencer Stuart, who helps train CEOs and advises boards.
“What we’re seeing across the board is a desire for CEOs who bring more of a start-up mentality and adaptability, rather than an uncompromising defense of ‘it’s always been’,” says Baumgarten.
More than ever, CEOs need to think ahead about what their industry will look like and what their customers’ needs will be in the very long term. “You can’t just ‘play the CEO role’ and delegate it,” says Fawad Bajwa, global AI, analytics and data practice leader at Russell Reynolds. “You need to take control of what that means, in terms of the possibilities and restrictions and the potential risks.”
In an echo of the euphoria of the 1990s, when people understood that the internet would dramatically change lives but didn’t know exactly how or how quickly, the short-term expectation has possibly surpassed the reality of what AI will ultimately deliver. To be sure, the stock market has been volatile lately as investors try to gauge whether companies are overspending on AI in the near term.
Therefore, CEOs will have to guard against overexcitement and avoid placing bets on initiatives whose usefulness is relatively unclear. “You will be held accountable for delivering a return on investment,” says Boyden’s Hesters.
This has proven difficult so far: in fact, the increasing complexity of identifying where AI can make an impact has helped drive a recent increase in the number of companies opting for co-CEO arrangements, says Christine Barton, managing director and senior partner at Boston Consulting Group who leads CEO advisory practice in North America.
“It’s a very difficult skill set to bring together in a single individual,” says Barton. “Even if people have mastered the ability to combine these skills, are they really optimizing these very different parts of the brain?” In a related move, more companies have made their CTOs and CIOs more central in defining overall corporate strategy alongside the rest of their senior leadership.
It’s not just Fortune 500 CEOs who will have to demonstrate resourcefulness and agility in the face of the AI revolution. Jeff Clavier, co-founder and board member of venture capital manager Uncork Capital, says he asks the CEOs of the startups in his portfolio to imagine what a fully AI-enabled version of their company and industry would look like — because, he tells them, for every one of their companies there are 10 other startups preparing for AI.
“The key trait for CEOs in an AI world is the ability to accept that fundamental changes are going to happen much, much faster than typical innovation curves,” says Clavier.
He points out how ChatGPT, with just over three years of existence, has changed so much. Every leader will have to accept the possibility of needing to completely reinvent their business, in a short period of time and on a recurring basis, in the age of AI — in other words, accessing their inner Satya Nadella.
