AI Becomes Top Priority for CIOs in 2024

With the launch of ChatGPT late last year, 2023 became the year of AI. Competitors produced their own chatbots and generative AI went mainstream in every industry from retail to education. It makes sense, then, that the Annual CIO Survey Report for 20241 identifies AI as the top spending priority for CIOs next year.

Two-thirds of respondents said that, generally, IT’s biggest role in helping their business relates to the optimization and support of existing systems and processes. This includes cost reduction, improved efficiency, reliable response to service tickets, and “keeping the lights on.” AI is a natural fit for all of these use cases and CIOs are showing interest in all types of generative AI to meet their needs.

CIOs are most interested in using AI for analytics and low-level repetitive tasks, with the latter showing the greatest potential use case growth in 2024. But the single greatest interest for CIOs is in industry-specific generative AI tools. In fact, nearly 58% of CIOs are reportedly waiting for professional-grade tools to be developed for their use, suggesting that a large demand for yet-to-be-developed AI technology and tools could drive significant growth in 2024.

Over half of the survey respondents report only being in the exploratory phase when it comes to AI, suggesting that the boom in adoption is yet to come. Another fifth of respondents are in the piloting phase, with presumably wide adoption and integration as their next step and the reason for prioritized spending in 2024.

Over 25% of CIOs surveyed anticipate their IT budget will increase by more than 10% next year. Meanwhile, less than 5% of CIOs expect a decline in IT spending. The expense of shifting a tech mandate to embrace such a technological disruption within a company can be referred to as the “switching cost.” These costs can be significant and often reinforce the momentum of a megatrend, like AI—the trend begets the spending, which in turn gives tailwinds to the trend.

The top five CIO priorities for 2024 are as follows:

  • AI (35%)
  • Robotic or intelligent process automation (24%)
  • No-code or low-code platforms (21%)
  • Data management (14%)
  • Internet of Things (13%)

All of the above priorities rely on enabling technologies like cloud computing, data processing and storage hardware, high-performance computing, and cybersecurity. The TrueShares Technology, AI & Deep Learning ETF (LRNZ) provides thematic exposure to a concentrated portfolio of tech companies that specialize in such enabling technologies. When CIOs prioritize AI with their IT budgets next year, we believe LRNZ, its secular growth companies, and their investors are poised to reap the rewards.

To get up to speed on all things AI investing, view our Investor’s Guide to Artificial Intelligence.