What CEOs Can Learn From the AI Backlash

One of the most important jobs for a CEO is to see what’s coming and then shift and adapt. That, of course, is how a business flourishes in changing and challenging times.

And yet it appears that chief executives of some of the biggest tech companies—think Meta and OpenAI—had little idea people across the country and political spectrum were about to turn and say, no more, when it comes to AI, especially around building the data centers needed to fuel this transformation.

My Journal colleague Tim Higgins in a column over the weekend explained how this happened. It’s a cautionary tale for all CEOs about the fallout they can face when they lose touch with everyday people. I asked Tim for more details about where we are now, and where we might be headed.

What about the Silicon Valley culture allowed tech CEOs to all miss the approaching backlash?

Tim: Tech has become increasingly insular. Its leaders felt burned by the tech backlash of a few years ago. Elon Musk’s acquisition of Twitter-turned-X helped spark a trend of “going direct” or bypassing traditional media and marketing. It has proven to be a powerful tool. But it also has helped create an echo chamber where tech leaders were mostly speaking to each other and not connecting with those in communities across the country.

Is there a tech CEO who seems savvier than their peers?

Tim: Long-established tech players such as Microsoft have been pretty savvy. Given its long history, it is not surprising that Microsoft has built up a formidable government and public relations apparatus. But in a lot of ways, it doesn’t matter. The idea of AI has become problematic in a lot of communities, for all sorts of different reasons, and that makes it more than just one company’s problem. As the saying goes, all politics is local.

Where do you see this going? Is it a lost cause?

Tim: It’s going to be a rough fall for tech as we head toward the midterm elections in November. It’s a confluence of events: Anthropic’s IPO is expected soon and that’s going to stoke a lot of excitement and attention on Wall Street. At the same time, agitation over AI data centers and Flock cameras have become huge issues in many areas.

But tech has some powerful weapons to deploy. These data centers create jobs and we’re beginning to see a bigger effort to flex that influence. OpenAI’s Sam Altman recently said the industry erred on selling the vision for AI, suggesting we’ll see a new approach in explaining why the technology is good for everyone—not just making more billionaires in San Francisco.

Erle NortonManaging Editor, C-Suite Content

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CEO Brief is written and edited by a team from The WSJ Leadership Institute: Alan Murray, president; Erle Norton, C-Suite Content managing editor; and Lila MacLellan, CEO Brief editor.

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