{"id":23455,"date":"2026-08-24T04:49:08","date_gmt":"2026-08-24T04:49:08","guid":{"rendered":"https:\/\/scannn.com\/for-enterprises-the-cautious-ai-era-has-begun\/"},"modified":"2026-08-24T04:49:08","modified_gmt":"2026-08-24T04:49:08","slug":"for-enterprises-the-cautious-ai-era-has-begun","status":"publish","type":"post","link":"https:\/\/scannn.com\/lv\/for-enterprises-the-cautious-ai-era-has-begun\/","title":{"rendered":"For enterprises, the cautious AI era has begun"},"content":{"rendered":"\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><br \/>\n        <br \/>\n        Listen to the article<\/p>\n<p>            <span class=\"text-to-speech__button__audio-length\">11 min<\/span><\/p>\n<p>    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"https:\/\/text-to-speech.divecdn.com\/newspost\/827736\/2026-08-17_07.00.00\/enterprises-cautious-era-spending-workforce-policy.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a href=\"https:\/\/www.ciodive.com\/contact\/\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<p>As companies mature in their AI deployment and double down on <a href=\"https:\/\/www.ciodive.com\/news\/global-AI-spend-2026\/820656\/\">their previous investments<\/a> into the technology, <a href=\"https:\/\/www.ciodive.com\/news\/execs-fear-job-loss-AI\/818008\/\">pressure on executives<\/a> has reached a fever pitch.\u00a0<\/p>\n<p>Early 2026 was the era of <a href=\"https:\/\/www.ciodive.com\/news\/software-pricing-changes-SaaS-AI\/823170\/\">tokenmaxxing<\/a>, or ramping up use of AI compute units as much as possible to appear productive. But momentum from AI providers to transition from flat-rate subscriptions to <a href=\"https:\/\/www.ciodive.com\/news\/software-pricing-changes-SaaS-AI\/823170\/\">consumption-based pricing<\/a> has ramped up in the last few months.\u00a0<\/p>\n<p>Maximizing token use went from a novel concept to the flashiest strategy and then an unmanageable scenario, all in the span of six months, said Nicholas Merizzi, principal at Deloitte Consulting.<\/p>\n<p>The \u201cuse-AI-for-everything\u201d mindset many companies adopted in 2025 and into 2026 now bears a much larger price tag.\u00a0<\/p>\n<p>\u201cBefore CFOs could even get it on their radar, the bills, the damage had been done,&#8221; Merizzi said.\u00a0<\/p>\n<p>Rising AI spend is just one factor leading companies to take a more pragmatic approach to AI deployment in recent months, consultants and experts told CIO Dive. Shifts in federal and global tech policy, coupled with less-than-ideal workforce adoption of AI, has made the technology&#8217;s deployment more difficult in 2026.\u00a0<\/p>\n<p>\u201cNot everyone needs access to these systems,\u201d said Will Sommer, a senior director analyst at Gartner. \u201cAnd not every workflow needs to [use] AI.\u201d<\/p>\n<h3 class=\"standard-heading\">Exponential costs<\/h3>\n<p>Enterprises are reporting benefits from AI, but not the cost savings they might have expected. A recent <a href=\"https:\/\/www.ciodive.com\/news\/enterprise-roi-value-savings\/825234\/\">SAP report<\/a> found that AI use wasn\u2019t saving organizations money, but it did help employees create insights, make decisions and interact with customers.\u00a0\u00a0<\/p>\n<div class=\"pullquote\">\n<hr\/>\n<div class=\"pq-hr-wrapper\">\n<p class=\"pq-quote\">\u201cThe models produced by leading AI labs are getting more token-hungry faster than they are getting cheaper,\u201d<\/p>\n<div class=\"pq-headshot\"><img decoding=\"async\" alt=\"\" class=\"pq-headshot-img-hidden\" src=\"https:\/\/d12v9rtnomnebu.cloudfront.net\/diveimages\/corporate_site\/teampage\/square_profiles\/placeholder-200.png\"\/><\/div>\n<div class=\"pq-speaker-details\">\n<p class=\"pq-speaker\">Will Sommer<\/p>\n<p class=\"pq-speaker-title\">senior director analyst, Gartner<\/p>\n<\/div>\n<\/div>\n<hr\/>\n<\/div>\n<p>It\u2019s a tough reality for companies that are spending millions to embed the technology into their workflows, while knowing the cost for AI will only grow \u2014 Gartner recently projected spending on AI models and platforms <a href=\"https:\/\/www.ciodive.com\/news\/ai-spending-soars-cios-grapple-with-costs\/825705\/\">will increase 63%<\/a> from last year, reaching $64 billion.\u00a0<\/p>\n<p>Although AI providers report foundational model costs are improving, and their operations are getting more efficient, it\u2019s not the full picture, Sommer said. As models advance, they also get more expensive to operate. Complex uses, such as agentic models or agents, can require three to five times more tokens for a single query than earlier models.\u00a0<\/p>\n<p>\u201cThe models produced by leading AI labs are getting more token-hungry faster than they are getting cheaper,\u201d Sommer said.\u00a0<\/p>\n<p>Token costs are not falling, they are widening, he said. Cost increases from escalating model capability and token consumption will soon outweigh any cost savings companies find from AI efficiencies \u2014 if they haven\u2019t already, Sommer said.<\/p>\n<p>Vendor fragmentation, inconsistent pricing models and constant price volatility are additional cost challenges enterprises face, Merizzi said. Executives are debating <a href=\"https:\/\/www.ciodive.com\/news\/ceos-cios-clash-ai-value\/823823\/\">how to define AI value<\/a>, but finding it has become increasingly important as the true cost of the technology reveals itself.\u00a0<\/p>\n<p>\u201cThe ability to link the spend to business outcomes is still evolving for a lot of our clients right now,\u201d Merizzi said.\u00a0<\/p>\n<p>At this point in the AI lifecycle for most companies, CIOs should be able to connect some amount of their tokens to an increase in revenue, a positive difference in the client experience or speed and quality of their team\u2019s work.\u00a0<\/p>\n<p>\u201cIf you can\u2019t do that, you should be making adjustments, and use lower cost models and alternative means,\u201d Merizzi said.<\/p>\n<h3 class=\"standard-heading\">Shifting AI policy<\/h3>\n<p>Although American AI providers and the companies that use them were <a href=\"https:\/\/www.ciodive.com\/news\/white-house-ai-executive-order\/698128\/\">mostly spared<\/a> from government regulation of the technology for most of its lifecycle, 2026 ushered in a new era of oversight.\u00a0<\/p>\n<p>President Donald Trump signed an executive order in May establishing a <a href=\"https:\/\/www.ciodive.com\/news\/CIOs-trump-ai-oversight-executive-order\/821942\/\">voluntary review of frontier AI models<\/a> to assess safety vulnerabilities before they\u2019ve been released to the public. It aims to screen AI models for national security concerns, such as those raised by Anthropic\u2019s <a href=\"https:\/\/www.darkreading.com\/cybersecurity-operations\/anthropic-mythos-cyber-what-comes-next?_sp=51eba5ba-b41c-4e48-b736-37503ed98729\">Claude Mythos<\/a> unveiled in April.<\/p>\n<p>\u201cThe Trump administration has largely been all gas, no brakes, on advancing innovation somewhat in this lens of anti-China,\u201d said Jeff Le, managing principal at tech consultancy 100 Mile Strategies. \u201cAnd now it\u2019s realizing, &#8216;Oh we have these tools that we don&#8217;t know how we can control.\u2019\u201d<\/p>\n<section class=\"storylines-carousel-wrapper hide-small show-large\" id=\"desktop-carousel\"\/>\n<p>AI has presented national security risks in a way prior technology didn\u2019t. It\u2019s given governments and foreign actors more access and options for both digital campaigns and physical operations, Le said. In the process, it also introduced more risk for enterprises.\u00a0<\/p>\n<p>The core transparency rules and general oversight powers of the <a href=\"https:\/\/www.ciodive.com\/news\/european-union-ai-act-compliance-enterprise-tips-enforcement\/743099\/\">EU\u2019s AI Act<\/a>, which includes prohibitions on unacceptable use cases and AI literacy obligations, took effect earlier this month and applies to all AI companies that wish to operate in Europe.\u00a0<\/p>\n<div class=\"pullquote\">\n<hr\/>\n<div class=\"pq-hr-wrapper\">\n<p class=\"pq-quote\">&#8220;It&#8217;s about whether an institution will, by surprise, be in the crosshairs of policymakers for doing what seemed to be like the normal course of business.\u201d<\/p>\n<div class=\"pq-headshot\"><img decoding=\"async\" alt=\"\" class=\"pq-headshot-img-hidden\" src=\"https:\/\/d12v9rtnomnebu.cloudfront.net\/diveimages\/corporate_site\/teampage\/square_profiles\/placeholder-200.png\"\/><\/div>\n<div class=\"pq-speaker-details\">\n<p class=\"pq-speaker\">Miranda Bogen<\/p>\n<p class=\"pq-speaker-title\">chief technologist at The Center for Democracy and Technology and director of the organization\u2019s AI Governance Lab<\/p>\n<\/div>\n<\/div>\n<hr\/>\n<\/div>\n<p>Some AI labs have been trying to get ahead of regulations. OpenAI in May released its Frontier Governance Framework, a look into the company\u2019s safety and security practices. The company said it <a href=\"https:\/\/www.ciodive.com\/news\/openai-security-framework-regulations\/821545\/\">planned to align<\/a> with emerging state and global AI regulations.\u00a0<\/p>\n<p>The policy landscape isn\u2019t one many companies have had to navigate before, according to Miranda Bogen, chief technologist at The Center for Democracy and Technology and director of the organization\u2019s AI Governance Lab. It\u2019s costly and time consuming to make sound decisions, she said, and evolving conditions present a risk factor that many companies don\u2019t want to deal with.<\/p>\n<p>\u201cThe policy landscape is so volatile,\u201d Bogen said. \u201cIt&#8217;s not only about uncertainty. It&#8217;s about whether an institution will, by surprise, be in the crosshairs of policymakers for doing what seemed to be like the normal course of business.\u201d<\/p>\n<p>Enterprises have an appetite for an institutionalized review of AI models, because they\u2019re risk-averse, Bogen said. But Trump&#8217;s executive order reviews a narrow set of the newest models and risk factors that most enterprises don\u2019t adopt immediately. The EU\u2019s AI Act will likely present more immediate ramifications for companies as there&#8217;s still a lot of uncertainty around what compliance looks like, Bogen said.\u00a0<\/p>\n<p>\u201cIt would make sense for institutions to be treading carefully there,\u201d Bogen said.\u00a0<\/p>\n<section class=\"storylines-carousel-wrapper show-small hide-large\" id=\"mobile-carousel\"\/>\n<h3 class=\"standard-heading\">Upskilling the workforce<\/h3>\n<p>Humans are a key part of successful AI adoption, said J.P. Gownder, VP and principal analyst at Forrester.\u00a0<\/p>\n<p>But there\u2019s a large gap between CIOs\u2019 expectations of their workforce and the reality of their abilities, he said. In <a href=\"https:\/\/www.forrester.com\/report\/aiq-2-0-employees-still-arent-ready-to-succeed-with-workforce-ai\/RES192767\">a 2025 survey<\/a> of how organizations are using AI, Forrester found only 16% of information workers had a high understanding of AI tools, compared with 43% who were in jeopardy of misunderstanding it.\u00a0<\/p>\n<div class=\"pullquote\">\n<hr\/>\n<div class=\"pq-hr-wrapper\">\n<p class=\"pq-quote\">\u201cThe lack of understanding, skills and ethics that employees writ large have is a huge barrier to not only adopting AI successfully, but to driving good outcomes, positive return on investments and all the things that we are challenged by at the moment,\u201d<\/p>\n<div class=\"pq-headshot\"><img decoding=\"async\" alt=\"\" class=\"pq-headshot-img-hidden\" src=\"https:\/\/d12v9rtnomnebu.cloudfront.net\/diveimages\/corporate_site\/teampage\/square_profiles\/placeholder-200.png\"\/><\/div>\n<div class=\"pq-speaker-details\">\n<p class=\"pq-speaker\">J.P. Gownder<\/p>\n<p class=\"pq-speaker-title\">VP and principal analyst, Forrester.<\/p>\n<\/div>\n<\/div>\n<hr\/>\n<\/div>\n<p>\u201cThat means you&#8217;re not really ready to use AI at work, but when you do use it, it&#8217;s generating risks for the organization,\u201d Gownder said.\u00a0<\/p>\n<p>Forrester also found that fewer than half of surveyed information workers said they know when to question the output of AI, and 42% said they sometimes refrain from using AI due to ethics, privacy or business risk.<\/p>\n<p>Employees are reporting that they <a href=\"https:\/\/www.ciodive.com\/news\/employee-distrust-hinders-ai-scale\/825837\/\">feel personal risk<\/a> from autonomous systems because of their lack of control over how and when AI is deployed. As a response, they\u2019re limiting their use. When they do use AI, business tasks represent just one-quarter of total AI usage by professionals, according to <a href=\"https:\/\/www.ciodive.com\/news\/AI-skills-gap-training-comptia\/825834\/\">CompTIA data<\/a>.\u00a0<\/p>\n<p>\u201cThe lack of understanding, skills and ethics that employees writ large have is a huge barrier to not only adopting AI successfully, but to driving good outcomes, positive return on investments and all the things that we are challenged by at the moment,\u201d Gownder said.<\/p>\n<p>The imbalance of executive boards\u2019 expectations and their workforce\u2019s skills is usually institutional, Gownder said. Within an enterprise, a majority of employees are not technologists and are not given the proper resources to learn this new part of their role. Most companies are skipping the organizational overhaul needed to truly embed AI and train their employees on it.\u00a0<\/p>\n<p>The technology is at the center of <a href=\"https:\/\/www.ciodive.com\/news\/glassdoor-technology-hiring-sentiment-AI\/814373\/\">scores of layoffs<\/a> this year, but executives who think they can replace roles with AI agents have outsized expectations, Gownder said. Most employees use AI to help accomplish some of their tasks, but not to do their whole job.\u00a0<\/p>\n<p>\u201cAI is being blamed for financialized layoffs that have nothing to do with AI,\u201d Gownder said. \u201cAI isn&#8217;t really ready to do that work.\u201d<\/p>\n<h3 class=\"standard-heading\">Where IT leaders go from here<\/h3>\n<p>CIOs who are overwhelmed by changing AI cost structures, regulations and workforce needs can find some solace in knowing there are ways to regain control.\u00a0<\/p>\n<p>To start, tech executives need to get a clear picture of what their token consumption looks like, Sommer said. To keep costs in check, they can swap AI models for more domain-specific ones, or open source models. They can also change how the models run, playing with factors such as latency to get more efficient use.\u00a0<\/p>\n<p>CIOs can also change who or what gets to run the models, adjusting the number of loops it makes, or setting permissions for who can operate them and when they can run. Lastly, organizations should change physical workflows to reflect the operational advantages of AI.\u00a0<\/p>\n<p>\u201cIf AI spending is volatile and exceeds expectations, the models might not actually be the problem,\u201d Sommer said. \u201cThe issue may be a misalignment between how humans think about the problem and how AI actually solves those problems.\u201d<\/p>\n<p>Executives who do not understand the business use cases and how they\u2019re going to measure AI success should reel in their investments until that\u2019s clarified, Le said. They also need a realistic picture of their employee\u2019s abilities.<\/p>\n<p>\u201cHow much do people really understand what is being used and deployed accordingly?\u201d Le said. \u201cThat&#8217;s really hard if you&#8217;re [coming] from a CIO&#8217;s perspective, wrapping your arms around both an education and re-education of people at all levels.\u201d<\/p>\n<p>Every organization \u2014 even those with early AI adopters or tech-natives \u2014 will need to increase the AI knowledge of their workforce to see ROI, Gownder said.\u00a0<\/p>\n<p>Organizations shouldn\u2019t rely on online, on-demand training, Gownder said. He recommended companies devote time to learning how to solve problems using AI through sandbox hackathons for non-technical employees. It\u2019s important that organizations don\u2019t push employees to learn AI skills on their own time, he said.<\/p>\n<p>It\u2019s clear the days of racing toward a cliff\u2019s edge with an &#8220;AI-or-bust\u201d mentality are gone, Le said. The technology is too pricey, too risky, too far from seamless integration at this moment to continue being the magic touch many companies felt they were promised.\u00a0<\/p>\n<p>But it is certainly not on its way out. Between the choice to accelerate or hit the brakes on their AI operations, Le said companies will continue to hit the gas.\u00a0<\/p>\n<p>\u201cIf you brake, you will be penalized. With the accelerator, you may be in a stronger position if you can get enough oversight, accountability and compliance to manage it,\u201d Le said. \u201cBut it is a risky point. Hopefully, if you hit the edge of the cliff, you have built enough wings that you can fly.\u201d<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/www.ciodive.com\/news\/enterprises-cautious-era-spending-workforce-policy\/827736\/?utm_source=tldrit\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Listen to the article 11 min This audio is auto-generated. Please let us know if you have feedback. As companies mature in their AI deployment and double down on their previous investments into the technology, pressure on executives has reached a fever pitch.\u00a0 Early 2026 was the era of tokenmaxxing, or ramping up use of [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":23456,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[143],"tags":[],"class_list":["post-23455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai"],"_links":{"self":[{"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/posts\/23455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/comments?post=23455"}],"version-history":[{"count":0,"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/posts\/23455\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/media\/23456"}],"wp:attachment":[{"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/media?parent=23455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/categories?post=23455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scannn.com\/lv\/wp-json\/wp\/v2\/tags?post=23455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}