Good morning. CFOs are gearing up to continue AI strategy plans in 2025. However, Michael Schrage, a research fellow with the MIT Sloan School of Management's Initiative on the Digital Economy, predicts that AI will also fundamentally change the CFO role.
I’ve previously talked with Schrage about his research on how “GenAI KPIs” are on the horizon in finance, and financial planning and analysis professionals will most likely use generative AI-based stress-testing scenarios. So I recently reached out to him for his assessment of how the job of finance chiefs will be redefined.
In the following Q&A, Schrage shares his viewpoints.
How will AI impact the evolving role of the CFO?
The ongoing ‘Compound AI’ revolution, which involves approaching AI tasks by combining multiple interacting components, will increasingly transform the CFO role into that of an AI-powered chief capital officer (CCO). This is an analytics-driven shift that isn't optional but imperative for enterprise growth.
Traditional CFOs primarily focusing on financial capital and quarterly reporting will become anachronisms, replaced by or reporting to AI-augmented CCOs orchestrating 'value creation' across all capital forms through predictive intelligence and real-time optimization.
What will the CCO role entail?
AI-enhanced CCOs will leverage large language models like ChatGPT and Llama to decode the complex narratives hidden in corporate data, revealing previously invisible connections between human, social, intellectual, and financial capital. Predictive AI will serve as their sixth sense, continuously forecasting how capital investments cascade through enterprise ecosystems. Generative AI agents will run risk-adjusted scenarios to identify optimal capital allocation strategies across all forms of value.
Why do you think a CCO’s function will essentially become more impactful than the traditional CFO role?
The CCO's competitive advantages will come from their focus on harnessing AI to recognize patterns in capital flows that human analysis alone could never detect. Their AI systems will track the ripple effects of every investment decision—how leadership development programs (human capital) spark innovation (intellectual capital), strengthen customer relationships (social capital), and ultimately drive financial performance. This granular, explicit and specific AI-powered visibility enables them to architect strategies that generate compound returns across multiple capital dimensions simultaneously. That’s huge.
Will CCOs have a more forward-looking perspective?
Most critically, these AI-augmented CCOs will shift from backward-looking financial stewardship to forward-looking capital orchestration, using predictive intelligence to anticipate value creation opportunities and threats before they materialize. The masters of these AI transformations will become the maestros of multi-modal enterprise capital as artificial intelligence learns to exceed human intelligence.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
