AI Financial Risks Nobody's Talking About
What are the long-term impacts of AI adoption to your numbers?
This week, Joel Salinas from Leadership in Change asked me to guest write on AI adoption this week, from a finance lens specifically. Not “should you adopt AI.” That is quite obvious at this point. The real question is: what happens to your numbers after headcount savings?
Joel coaches AI strategy for leaders at small and mid-sized businesses, so he’s in these conversations daily. His read going into this piece: the question leaders actually want answered isn’t which tool to adopt, it’s what AI is going to do to their numbers. Nobody’s having that conversation beyond headcount savings. He also put together a sharp set of follow up questions at the end of the post with straight answers. I am biased but it’s worth the read, I promise.
Here’s what I keep seeing in AI rollout plans. The cost savings get a full slide or two in the deck. The downside scenarios get a shrug. So that’s what I wrote about: the three financial blind spots that will show up later, not on day one. Below is a quick summary of the points mentioned in the article but the full article has a lot more meat to it and it’s worth checking out for better decision making. Read the full piece here: AI Financial Risk: What Leaders Aren’t Modeling Yet.
In Summary:
1. Vendor pricing isn’t fixed. Your AI subscription costs today are not your AI subscription costs in two years. Read the price increase language in those contracts before you build flat costs into a five year model.
2. The tax bill on headcount cuts. Salary savings become taxable income. Tax legislation around AI driven layoffs is still being written. If your board deck shows savings without a tax line, it’s not done yet.
3. Your customers might be somebody’s (former) employee. If AI eliminates jobs at scale, some of those people were your customers. Stress test what happens to revenue when your market shrinks, not just what happens to costs.
That’s the quick version. Each of the three items above get a full breakdown in the post, plus a CFO Tip telling you exactly what to do about it, not just what to worry about. Read the full post here.
If you’re a founder: this matters at fundraise time. If your projections lean on AI driven savings, expect investors to ask whether you’ve modeled the downside. Better to walk in having already done it. If you want help actually building that model instead of just thinking about it, that’s what my 1:1 office hours sessions are for.
If you’re a VC: this is portfolio level risk. Any company leaning hard into AI cost savings without pricing risk, tax exposure, or demand contraction modeled in has an incomplete forecast. Are you examining this enough?
The line that sums up why I wrote this piece: “the leaders who will come out ahead are not necessarily the ones who move the fastest when it comes to AI adoption, they are the ones who account for what everyone else is ignoring.”
Full piece, with the numbers, Joel’s leader-questions section, and what to actually do about each blind spot, is here → AI Financial Risk: What Leaders Aren’t Modeling Yet
And if this is your kind of thing, this is what I write every month at The Creative CFO. A few ways to go deeper:
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Hey carla, i read the full version of your article on someone else's post but I love reasoning you put together.I think you ask the right questions, while every one is running to scramble for the tools without realising that the human displacement it causes and how is that going to impact.
You have listed the right questions and i think this needs to be understood.
Awesome read. Thank you for writing.