Read Time: 18 minutes
TL;DR
A CEO tells the board the company is “all in on AI.” Three floors down, here’s what that actually means: marketing is running a chatbot nobody in security has heard of, finance just pasted the quarterly numbers into a personal ChatGPT account, a developer wired an autonomous agent into the production database last week, and HR is drawing up a list of roles to cut because “the AI can do it now.” That isn’t a strategy. It’s a subscription dressed up as one.
A real AI strategy has an owner, in-house expertise, a workforce you amplify instead of fire, clean data underneath it, enforceable policies, an infrastructure plan, and visibility into every model and agent on your network. Most companies in 2026 have almost none of this. They have adoption without governance, tools without owners, and agents nobody is watching.
The numbers back it up. Around 88% of organizations now use AI in at least one business function, but only about a quarter have a real governance framework. Roughly three in four plan to adopt agentic AI within two years, while only one in five can govern the agents they already run. 49% of employees use AI tools their company never approved. And only 7% say their data is actually ready for AI.
That gap between what companies use and what they actually control is the AI strategy vacuum. In my experience it has seven recurring holes. Let’s go through them.
One thing up front. I’m not anti-AI, and I’m not here to talk anyone out of it. I run AI agents every day in my own work. The problem isn’t that companies use AI. It’s that “we use AI” has quietly come to mean “we have an AI strategy,” and those are two very different things, about as different as owning a car and knowing how to drive it.
Hole #1: No One Owns AI — The Missing CAIO
Try this test on your own organization. Who is accountable, by name, for AI strategy, AI risk, and AI ROI? If the honest answer is “well, IT and the CISO and that VP in marketing each handle a piece of it,” then nobody owns it. Shared responsibility for something this big usually means no responsibility at all.
This is why the Chief AI Officer (CAIO) has become the fastest-growing seat in the C-suite. IBM polled 2,000 CEOs worldwide for its 2026 study and found that 76% now report having a CAIO, up from just 26% a year earlier. Heineken, WPP, Nike, and CVS Health have all created the role. The payoff shows up in the data too: companies with a CAIO are close to 3x more likely to reach top-tier AI maturity (Futurum) and see meaningfully higher returns on their AI spend (IBM).
But that 76% flatters the picture. Among large enterprises specifically, only about a quarter have a genuinely dedicated CAIO. Plenty of the rest handed someone the title and nothing else: a “Head of AI” with no budget, no say over procurement, and no authority to kill a bad project.
A CAIO who can’t veto a reckless deployment isn’t a strategy owner. They’re a press release.
The point isn’t the org chart. It’s that without one accountable person, AI decisions default to whoever moves first, which is usually a department expensing a tool on a corporate card. Nobody is weighing speed against risk, nobody is tying AI spend to outcomes, and nobody has a real answer when the board asks what the exposure is. It shows: only about 32% of organizations have any formal process to measure whether their AI investments are working at all. Most are scaling something they can’t even score.
So appoint someone real. Give that person authority over strategy, budget, risk, and procurement, not just the fun “innovation” part, and a remit that crosses IT, security, legal, data, and the business units. Hold them to results and to a number, because the goal was never “we use AI”, it was “AI moved these numbers”. And if you’re too small for a dedicated CAIO, that’s fine, but still name the owner. The diffusion of responsibility is the problem, not the headcount.
Hole #2: No AI Experts In-House — Where’s Your AI Red Team?
A CAIO with no team is a general with no army. The second hole is the near-total absence of in-house AI expertise, and it’s worst on the security side.
When CIO.com asked CIOs what was holding back enterprise AI in its 2026 State of the CIO survey, the top answer, at 40%, was lack of in-house talent. A separate 2026 hiring survey found 91% of organizations prioritizing AI-skilled hires, with AI engineers (39%) ranked the hardest role to fill, just ahead of cybersecurity engineers (38%).
Most of the roles companies are missing barely existed three years ago:
- The AI Red Team, whose job is to break your own models before someone else does: jailbreaks, prompt injection, model extraction, data poisoning, agent manipulation. Job boards listed more than 2,500 active AI/ML security engineer postings as of March 2026.
- AI security engineers to lock down the pipeline, from the model supply chain and MCP servers to agent permissions and inference endpoints. About 32% of hiring organizations added them in 2026.
- AI/ML security specialists (34%) and AI governance analysts (30%), the people who turn policy into actual controls and the evidence an auditor will ask for.
Accenture’s 2026 workforce report puts a finer point on it: for the first time, skills gaps overtook headcount as the top security workforce problem. It isn’t only that you don’t have enough people. It’s that the people you have were trained for a pre-AI world. A firewall admin who has never seen a prompt-injection attack is not your AI Red Team.
And this isn’t only about the specialists. Broad AI literacy across the whole workforce is now the baseline, not a nice-to-have, and in the EU it’s literally the law: the AI Act’s AI-literacy obligation has been in force since February 2025. IBM reckons more than half of employees need upskilling just to keep doing their current jobs well in an AI world. A strategy that trains a tiny elite and leaves everyone else to figure it out on their own is how you get Shadow AI in the first place.
I’ve written before about AI Agent Skill Poisoning and how to weaponize agent skills. Those attacks are invisible to a team without someone who understands how agents actually work under the hood. You can’t defend a threat model you’ve never studied.
So build a standing adversarial testing function, even a small or contracted one, instead of a once-a-year audit. Retrain the security people you already have on AI-specific threats; OWASP’s Top 10 for LLMs and its agentic threat work are free places to start. Hire for the real role when you hire, an AI security engineer or governance analyst, not “AI” bolted onto a generic IT job description. And put a real AI-literacy program in front of everyone else. Treat in-house expertise as a control, not a perk. It’s the only thing standing between a vendor’s claim and your reality.
Hole #3: Firing People Instead of Amplifying Them
Here’s the hole that gets celebrated as strategy in press releases and turns into a quiet rehiring spree six months later.
In 2026, companies aren’t just adopting AI, they’re using it as the reason to cut people. According to Challenger, Gray & Christmas, AI was cited in 87,714 US job cuts through May 2026, around 22% of all layoffs this year — already more than the 54,836 blamed on AI in all of 2025, and by May it had become the single most-cited reason for cuts. Salesforce says AI agents now handle around half its customer interactions and has “rebalanced” headcount accordingly; Block is shrinking from roughly 10,000 employees to 6,000.
The trouble is that a lot of this is a bet on what AI might do, not what it has done. A late-2025 Harvard Business Review survey found most executives cutting on AI grounds were doing it on the technology’s expected potential, not its demonstrated performance. And the bill is already arriving: Forrester found 55% of employers regret their AI-driven layoffs, and Gartner expects that by 2027, half of the companies that cut headcount citing AI will rehire for similar roles — often under new titles, sometimes at lower pay.
The textbook case is Klarna. It replaced roughly 700 customer-service staff with an OpenAI-built assistant and bragged that AI handled two-thirds of all support tickets. Then quality and customer trust fell off a cliff, and the CEO admitted the company had “gone too far.” Klarna is now hiring humans back. The lesson every analyst drew from it is the same: AI should augment people, not replace them.
This is the argument I made in AI Must Make Superhumans, Not Unemployed. As Jensen Huang put it, companies with imagination use AI to do more with more; companies out of ideas just use it to do the same with fewer. Firing your way to an “AI strategy” throws away the one thing the model doesn’t have, your people’s context: who the customers are, why the process exists, where the bodies are buried. Pair that human context with AI and you get something neither can do alone. Strip it out and you’re left with a faster way to produce confident, unaccountable mistakes.
To be fair, this doesn’t mean headcount never legitimately changes. Roles do shift, and some genuinely shrink as work gets automated, and that can be the right call. The mistake is making that call on a bet about what AI might do, before you’ve shown it can, and throwing away your people’s hard-won context in the bargain.
A real strategy here is explicit about it. Decide, out loud, that AI is there to multiply your people’s output, not to thin the ranks. Redeploy the time AI frees up toward higher-value work instead of treating it purely as a cost to extract. Keep humans in the loop on anything that touches customers, money, or judgment. And be deeply suspicious of any “we replaced the team with agents” plan that hasn’t priced in the rehiring, the lost trust, and the institutional knowledge walking out the door.
Hole #4: No Data Foundation
Every one of the holes above sits on top of this one, and it’s the one nobody wants to talk about because it isn’t shiny.
AI runs on your data, and most companies’ data is a mess. According to a 2026 Cloudera and Harvard Business Review Analytic Services report, only 7% of enterprises say their data is completely ready for AI, and other research puts it more bluntly: roughly 93% don’t have AI-ready data, and only about 30% have adequate data governance. Nearly 80% of organizations say data-access problems are actively holding their AI back.
This is why so much AI never makes it out of the lab. Somewhere around 80% of AI projects fail to reach production, about twice the failure rate of ordinary IT projects, and Gartner expects 60% of AI projects that lack AI-ready data to be abandoned through 2026. The model is almost never the problem. The data feeding it is: fragmented across systems, undocumented, ungoverned, full of duplicates and gaps, and impossible to trace.
There’s a security dimension too, and it’s the one that bites quietly. If you don’t know where your sensitive data lives, you can’t keep it out of the prompts. Every Shadow AI leak and every over-permissioned agent in the later holes is, underneath, a data-governance failure. You can’t protect what you haven’t classified.
A data foundation isn’t glamorous, but it’s the work that makes everything else pay off. Know what data you have and classify it by sensitivity. Fix ownership, quality, and lineage so you can answer “where did this come from” for anything an AI touches. Put access controls and retention rules on it before you point a model at it. The companies getting real returns from AI mostly aren’t the ones with the cleverest models. They’re the ones that did this boring work first.
Hole #5: No AI Policies — Usage, Privacy, and the Missing Blacklist
This is the cheapest hole to close and the one left open most often.
The numbers aren’t encouraging. Only 38% of US companies have published an AI policy at all. Close to a third have no AI governance policy whatsoever, with another quarter still “implementing” one. 78% of executives are not strongly confident they could pass an independent AI governance audit within 90 days (Grant Thornton, 2026). On the security side it’s worse: per Salesforce’s 2026 data, 67% of employees already use AI at work but only 18% of organizations have a formal AI security policy.
A real policy framework is not a one-page “please be responsible” memo. It’s a handful of documents people can actually be held to:
- An acceptable use policy that says which tools are approved, for what, and under what conditions. Cursor for prototyping, fine. Pasting source code into a personal ChatGPT account, no.
- A data and privacy policy that names the data classes that must never touch an AI system: customer PII, PHI, financials, secrets, anything regulated. This is what stops your customer records and source code from leaking into random tools.
- An approved list and a blacklist. Almost everyone forgets the blacklist. You need an explicit, maintained list of prohibited tools and models, the unvetted consumer apps, the ones with hostile data-retention terms, the browser extensions that phone home, anything self-hosted with no authentication. A blacklist gives your DLP and proxy something concrete to block.
- Vendor and model governance covering data residency, retention, the right to audit, and whether your data trains their model.
- Incident and exception handling: how someone requests a new tool, and what happens when the rules get broken.
If you operate in or sell into Europe, a chunk of this is no longer optional. The EU AI Act is now partly in force: bans on certain practices and the AI-literacy duty have applied since February 2025, the rules for general-purpose AI models since August 2025, and a major compliance date lands on 2 August 2026, with fines reaching up to 7% of global turnover for the worst violations. The high-risk obligations were pushed back to late 2027 and 2028 under the Digital Omnibus, but “we’ll deal with it later” is not a plan when the literacy and transparency clocks are already running.
And it isn’t only Brussels. Member states are layering their own national laws on top. Spain, for example, approved its draft Organic Law for the Good Use and Governance of AI in May 2026, now working its way through parliament. It backs the EU rules with a domestic penalty regime (up to €35M or 7% of global turnover), a mandatory requirement to label deepfakes and AI-generated content, and a national supervisor, AESIA, that has held full sanctioning powers since August 2025 and runs a regulatory sandbox companies can apply to. The United States has no single federal statute but a fast-multiplying patchwork of state laws instead. The practical takeaway: “which AI laws apply to us, in every market we operate in?” is now a question your strategy has to answer, not a hypothetical to park for later.
Here’s the catch with policy on its own: 46% of shadow-AI users say they’d keep using their tools even if the company explicitly banned them. A policy that lives in a PDF nobody reads is theater. To matter, it has to be wired into proxies, DLP, SSO, and OAuth consent controls. Write the core policies, keep them short and specific, map every rule to a control that enforces it, maintain the blacklist as a living document, and give people a fast path to “yes”, because when approval takes three weeks, they route around you.
Hole #6: No Hardware Strategy — Local and Sovereign AI
Most “AI strategies” have the shape of an API. Everything runs on someone else’s GPUs, in someone else’s jurisdiction, under someone else’s terms. That’s fine for a demo. For regulated data, intellectual property, and geopolitical risk it’s a liability, and it means there is no infrastructure plan at all.
I learned this one the hard way. When Anthropic blocked Claude subscriptions in third-party agents earlier this year, my whole agent setup was suddenly hostage to a pricing decision I had no part in. The fix was to own more of my own stack. The same logic scales up: if your entire AI capability can be switched off or repriced by a vendor on a Friday afternoon, that’s not a strategy, it’s a dependency.
2026 is the year sovereign and local AI stopped being a niche concern, and the money makes that obvious. McKinsey now sizes sovereign AI as a market worth $500–600 billion by 2030. NVIDIA’s own sovereign-AI revenue more than tripled to over $30 billion in fiscal 2026. European spending on sovereign-cloud infrastructure is forecast around $12.6 billion this year, an 83% jump, on top of €20 billion earmarked for AI gigafactories under the broader €200 billion InvestAI push. Gartner even coined a word for the reverse migration, geopatriation: pulling data and workloads out of global public clouds and back into local or sovereign environments to manage regulatory and geopolitical risk.
The case for owning some of your own compute comes down to four things. Data residency and compliance get easier when the data never leaves your walls or your jurisdiction. Your prompts, fine-tunes, and proprietary models stay yours instead of sitting on a third party’s training set. Costs become predictable capex for steady, high-volume workloads, rather than per-token opex that climbs with usage. And you stop being one outage, price hike, or policy change away from losing your AI capability overnight.
There’s a sharp edge here, though. Doing this without a strategy is exactly how you create the Shadow AI mess in the next section. A research team that expenses a $4K NVIDIA DGX Spark, plugs it into the network, and runs Ollama bound to 0.0.0.0 with no authentication has not built sovereign AI. They’ve built an exposed attack surface. As of February 2026, researchers found more than 10,000 Ollama instances reachable from the open internet, one in four running a vulnerable version, plenty of them hosting private corporate models. Local AI done deliberately is an asset. Local AI done in the shadows is a breach waiting for its disclosure date.
So decide your tiers on purpose: which workloads can sit on public model-as-a-service, which need a sovereign or regional cloud, and which have to run on-prem, tied to how sensitive the data is. Plan for a long runway, because these migrations take three to four years, and the slow part is organizational, not technical. Route all AI hardware through procurement with IT approval, network segmentation, and a security scan before anything touches the network. And protect private models like the IP they are.
Hole #7: No Agentic Visibility — The Shadow AI You Can’t See
You can’t govern what you can’t see, and on agents most companies are working blind.
I went deep on the mechanics of this in The Shadow Twin Threats: When AI and Vibe Coding Go Rogue in Your Network, the convergence of unsanctioned AI infrastructure (Shadow AI) and unreviewed AI-built applications (Shadow Vibe Coding). The short version is invisible models chewing on your most sensitive data, unvetted apps full of flaws, and no audit trail to reconstruct any of it. Organizations with heavy Shadow AI usage face breach costs averaging $4.63 million, about $670K more per incident than those that keep it under control.
Put autonomous agents on top of that and the visibility problem gets much worse. According to Strata’s 2026 research on agent identity, roughly 80% of organizations running autonomous AI can’t tell you in real time what those systems are doing or who’s responsible for them. Only 21% keep a real-time inventory of active agents, and only 28% can trace an agent’s actions back to a human sponsor. Most still authenticate agents with shared API keys; just 22% treat them as distinct identities. And the gap I find most alarming: a large majority of executives feel confident their current policies cover unauthorized agent actions, while in the field more than half of deployed agents run with no security oversight or logging at all.
That last contrast is the whole problem in miniature. Leadership believes there’s a strategy. The network says otherwise. Gartner expects that by the end of 2027, more than 40% of agentic AI projects will be scrapped, often because the governance problems only surface after something has already broken in production.
It’s worth remembering what an agent actually is: software that takes actions on your behalf. It reads data, calls APIs, moves money, writes and ships code, and increasingly talks to other agents, usually with standing credentials and little supervision. An agent you can’t see, can’t inventory, and can’t trace to an owner is effectively an insider with system access and no manager.
The way out starts with discovery, not policy. Pull AI domains from your DNS and proxy logs, review OAuth app consents in Entra ID and Google Workspace, scan for exposed AI ports (11434 for Ollama, 1234 for LM Studio), and run an anonymous survey to find out what people are really using. Then build a live agent inventory where every agent has a distinct identity, an owner, scoped permissions, and logging, and retire the shared keys. Make every agent action traceable to a human sponsor, because audits and incident response depend on it. And apply least privilege and monitoring to these non-human identities exactly as you would to staff, because they are acting in your name.
“But Won’t All This Slow Us Down?”
This is the objection I hear most, usually from whoever is currently expensing AI tools on a credit card. It’s worth taking seriously, because the fear is real: governance can absolutely turn into a committee that says no to everything and ships nothing.
But the data points the other way. In Grant Thornton’s 2026 survey, the organizations with fully integrated, well-governed AI were the most confident they could pass an audit and were getting better returns, not worse. That’s not a coincidence. Governance is what lets you say yes quickly and safely, because there’s an approved-tools list, a data policy, and an owner who can make a call. The companies that feel “slowed down” by governance are usually the ones bolting it on after an incident, as cleanup, instead of building it in as a fast lane.
Speed and control aren’t opposites here. The Klarna reversal, the abandoned AI projects, the breach disclosures, those are what slow you down. A strategy is how you go fast without driving into a wall.
The Pattern: Adoption Without Strategy
Step back and the seven holes are really one failure in seven costumes:
| What companies have | What strategy requires |
|---|---|
| ChatGPT and Copilot licenses | A named owner accountable for AI risk and ROI (CAIO) |
| Vendor promises | In-house expertise, an AI Red Team that can verify them |
| Layoff press releases | A workforce amplified by AI, not replaced by it |
| Data scattered across silos | An AI-ready, governed data foundation |
| A “be responsible” memo | Enforceable usage, privacy, and blacklist policies |
| Everything on someone else’s GPUs | A deliberate local and sovereign infrastructure plan |
| Confidence that it’s “handled” | Real-time visibility into every model and agent |
The through-line is that roughly nine in ten companies have adopted AI while only about a quarter have built the governance to match. They bought the tool and skipped the strategy.
None of this argues against AI. If anything it argues the opposite. AI is too powerful and too deep into regulated work to keep running it the way most companies do now, improvised, unowned, unmonitored, and undocumented. The companies that win this decade won’t be the ones that adopted fastest. They’ll be the ones that governed it well enough to scale it safely.
Where to Start
Seven holes is a lot to stare at, so don’t try to fill them all at once. The order matters more than the speed.
- Name the owner. Nothing else gets sequenced until someone is accountable. Week one, not next quarter.
- Discover what you already have. Before you write a single policy, find the Shadow AI: query DNS and proxy logs, review OAuth consents, scan for exposed AI ports, and run an anonymous survey. You’re governing reality, not a wish.
- Write the policies and wire them to controls. Acceptable use, data and privacy, the blacklist. Short, specific, enforced, EU AI Act-aware if Europe is in scope.
- Fix the data foundation in parallel. Classify and govern the data your models will touch. This is slow, so start it early and let it run alongside everything else.
- Build the expertise and the literacy. A small red team, AI-aware security staff, and a literacy program for everyone else.
- Plan the infrastructure. Decide your public/sovereign/on-prem tiers and bring hardware procurement under control.
- Get agent visibility and keep it. A live inventory, distinct identities, traceability to a human. This never “finishes.”
And running underneath all of it: treat AI as a way to make your people superhuman, not redundant. That’s a posture, not a project, and it colors every decision above.
The Bottom Line
“We use ChatGPT” answers the wrong question. The real one is whether you can name who owns your AI, prove it’s making your people better instead of just fewer, and produce a live inventory of every model and agent on your network. If you can’t answer those, you don’t have an AI strategy. You have an AI subscription and a quietly growing pile of risk.
The good news is that none of these seven holes is exotic. They’re the unglamorous, doable work of governance, and the companies that do it are the ones still standing when the first wave of AI-governance incidents hits the headlines.
The app built in twenty minutes, the agent nobody inventoried, the team fired in favor of a bot that gets quietly rehired six months later, those are tomorrow’s cautionary tales. Strategy is what keeps your company out of the next one.
- X (Twitter): @SimonRoses
Further Reading:
- IBM: The Rise and ROI of the Chief AI Officer
- Futurum: Organizations with a Chief AI Officer Are Nearly 3x More Likely to Reach Top AI Maturity
- CIO: What’s Holding Back Enterprise AI? Shortage of Talent
- OWASP Gen AI Security Project: AI and Agentic Red Teaming Landscape
- Axios: Cybersecurity Hiring Is Still Stuck in the Pre-AI Era (Accenture)
- Challenger, Gray & Christmas: May 2026 Job Cut Report (AI-Cited Cuts)
- Forrester / HR Executive: 55% of Employers Regret AI Layoffs
- Entrepreneur: Klarna CEO Reverses Course, Hires Humans Again
- Simon Roses: AI Must Make Superhumans, Not Unemployed
- Cloudera / HBR: Only 7% of Enterprises Say Their Data Is Ready for AI
- Grant Thornton: 2026 AI Impact Survey Report
- European Commission: The EU AI Act Regulatory Framework
- Gobierno de España: Ley para el Buen Uso y la Gobernanza de la IA
- Thomson Reuters: AI Governance Gap Between Policy and Practice
- McKinsey: Sovereign AI — Building Ecosystems for Strategic Resilience and Impact
- Dealroom: NVIDIA’s Sovereign AI Revenue Tripled to $30B
- Strata: The AI Agent Identity Crisis — A Governance Gap
- Gartner: 40% of Agentic AI Projects Will Be Scrapped by 2027
- The Shadow Twin Threats: When AI and Vibe Coding Go Rogue in Your Network













