Why do boards often get AI strategy wrong?

Boards sometimes treat AI strategy as a narrow technology review rather than a core competitive and governance question. The article notes that delegating AI to quarterly tech updates misses how AI reshapes competitive positioning and risk.

What strategic questions should boards ask about AI?

Boards should ask how AI affects the organization’s competitive position, what operational and regulatory risks arise, whether the company is building durable capability or renting temporary advantage and whether the investment thesis holds if policy environments change.

How can AI affect competitive positioning and regulatory risk?

AI can reshape markets, supply chains and operating models, creating new risks across operations and regulation. Boards must understand how AI initiatives could expose the enterprise to geopolitical shifts, compliance issues and supply-chain disruptions.

What does building durable capability mean in the context of AI strategy?

Building durable capability means developing institutional knowledge, data infrastructure and governance that endure beyond a particular tool or vendor. It is the opposite of renting short‑term advantage by buying a feature that can be easily replicated.

Why should AI strategy be discussed at board level rather than in technology updates?

AI strategy influences capital allocation, risk management and long‑term positioning. Treating it as a board‑level concern ensures leadership is accountable for how AI affects the business, rather than relegating it to a technical discussion.

What Boards Get Wrong About AI Strategy and What to Ask Instead

Mar 25

Written by Christopher Sanchez

If you serve on a board and your AI strategy consists of quarterly updates from the CTO, you have a tech review disguised as a strategy. Boards don't need to understand transformer architectures. But they do need to be able to answer:

- What is AI's role in our competitive positioning over the next decade?

-What are the material risks: operational, reputational, regulatory, and who owns them?

-Are we building durable capabilities or renting temporary advantages?

-How does our AI investment thesis hold up if the regulatory environment shifts?

These are strategy questions. They belong in the boardroom, not delegated to a technology committee.

Christopher Sanchez

Christopher Sanchez is a professor and entrepreneur advancing the future of AI infrastructure. These essays draw on his work with leadership teams, regulators, and investors on what AI changes for the decisions in front of them.

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