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
[email protected]
The following sections of CFO Daily were curated by Greg McKenna.
Leaderboard
Some notable moves:
Scott Frech was appointed CFO of American Hospital Shared Services (NYSE: AMS), a provider of radiosurgery and advanced radiation therapy equipment, effective immediately. He replaces Robert Hiatt, who has resigned from the position but will assist with the transition through Jan. 31.
Scott Ocholik was appointed interim CFO at The Shyft Group, Inc. (Nasdaq: SHYF) a specialty vehicle manufacturing company, effective Jan. 1. The appointment follows the previously announced resignation of CFO Jon Douyard. Shyft is conducting a CFO search. Ocholik has served as VP, chief accounting officer, and corporate controller since 2022, after joining Shyft in 2019 as VP and corporate controller. Before Shyft, he was EVP and CFO at Gestamp North America.
Felipe A. Corrado IV was appointed CFO and treasurer of AppTech Payments Corp. (Nasdaq: APCX). The company announced on Dec. 30 that Meilin Yu’s “Julia Yu” employment with and service as CFO and treasurer ended on Dec. 24, 2024. Corrado has served the company in various financial roles for about three years. He brings over two decades of experience as CFO, management consultant, practicing CPA, and auditor.
Ranojoy “RJ” Hazra was appointed CFO of HireRight, a provider of background screening and workplace compliance solutions. He joins the company with more than 15 years of executive experience in the finance and technology sectors.
Terry Olson has resigned as CFO of Andalusian Credit Company, a company with private equity, private credit, and sports advisory arms, according to a recent SEC filing. He will be succeeded by Mike Szczurek as the firm’s principal financial officer, the company said.
Kin Sze was appointed CFO of Metal Sky Star Acquisition Corporation (Nasdaq: MSSA), a blank check company, effective Dec. 20. He will replace Wenxi He, who has resigned from the position but will continue to serve as the company’s CEO.
Jason Searfoss was appointed CFO of Delta Capital Partners Management, a private equity firm specializing in litigation and legal finance. He previously served as CFO and CIO of Boomtown, a tech startup accelerator he cofounded in Boulder, Colorado.
Seung Ik Baik was appointed CFO of Exicure (Nasdaq: XCUR), historically an early-stage biotechnology company that has since undergone restructuring. Baik has 17 years of experience in corporate finance, accounting, and private equity.
Big Deal
U.S. Health care organizations could be poised for a turnaround this year after margin pressures, workforce shortages, and a broad push to adopt digital technologies, according to a new industry report from the Deloitte Center for Health Solutions. The firm surveyed 80 C-suite executives from health systems and health plans with revenue over $500 million.
Sixty percent of respondents hold a favorable outlook for this year, up from 52% a year ago. Sixty-nine percent of those surveyed anticipate revenue gains in 2025, with 71% expecting improved profitability.
Going deeper
Here are four Coins2Day weekend reads:
“How Revelry evolved from selling sorority gear out of the trunk of a car to building a $39 million wedding-wear empire,” by Sydney Lake
“The new retirement is no retirement: Baby boomers are keeping jobs well into their sixties and seventies because they ‘like going to work’,” by Alicia Adamczyk
“Tourism has become a dirty word. But 2025 could be the year vacationers stop being the villains, experts predict,” by Prarthana Prakash
“Insomnia affects up to 50% of adults and can hurt your body and brain. Experts say these tips can help you beat it,” by Ani Freedman
Overheard
“All things considered, the third best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks. For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come.”
— Warren Buffett, CEO and chairman of Berkshire Hathaway, wrote in a 2010 letter to shareholders about why he considers his Omaha house one of his best investments, Coins2Day recently reported.