Most CEOs I speak with are under extreme pressure from their boards to apply advanced AI in their businesses. It’s no secret that AI has enormous potential and power, yet while AI has been around for decades we are still really in the infancy stages, with rapid evolution. To understand at a deeper level how CEOs should view AI, I asked leaders from Broadcom, Google Fiber, and Calix. They shared three fundamentals CEOs should consider:

1. UNDERSTAND THE RAG MODEL

Right now, AI is still transactional. However, we have already seen shifts indicating AI is becoming experiential. Everyone is talking about generative AI, but what CEOs need to understand is a new variation called the RAG Model, which stands for Retrieval-Augmented Generation. This framework combines traditional databases with generative large language models. Michael Weening, CEO, Calix discussed how this accelerates outcomes for CEOs by mitigating one of the biggest obstacles associated with generative AI.

“These sophisticated systems, which are trained on data from the internet, have been known to provide answers that are unjustified and just plain wrong,” Weening said. “RAG architectures help prevent hallucinations by combining a large language model with business-specific data sources — think databases and documents. This integration helps ensure the AI is operating on the latest, most accurate data and that users can check sources for accuracy — two crucial requirements. CEOs are generally worried by Gen AI, but RAG architectures make it ready for business.”

2. DO NOT EXPECT MIRACLES FROM AI OVERNIGHT

There are so many advances in AI that many applications almost seem like you’re waving a magic wand. For those — like many CEOs — who are not living in the advanced AI world and instead doing their job of running an enterprise, they can be thrown new ideas and use cases which seem relevant. According to John Keib, Chief Technology and Product Officer, GFiber (Google) CEOs need to challenge themselves.

“They need to be able to think of things that they could never do before – exponentially,” Keib said. “It’s about moving from transactional AI to experiential AI, taking disparate data sets and combining them into an outcome, which has a lot more value.”

3. LOCATE THE VALUE

CEOs have learned not to follow the shiny object, and most will not just use technology for technology’s sake – no matter how exciting it is. After interviewing over 1,000 top CEOs, I can say a CEO’s job can be summed up in just six words: “To get from here to there.” And getting there is usually about creating new value that didn’t exist before. Charlie Kawwas, President, Semiconductor Solutions Group, Broadcom cited the potential of AI to provide consumers with better cybersecurity protection.

“Customers would be excited,” Kawwas said. “Because we would be protecting grandma, protecting kids, protecting families. And people would pay more to get a service like that.”

In Summary, the changes AI will usher in will have profound impact on business the economy and society. CEOs can leapfrog competitors and accelerate progress with the right focus ... and perspective.

Forbes