Williams Urges CFOs to Link AI Spending to Results as Capital Costs Loom

Chief financial officers should continue funding artificial intelligence projects while tying spending to measurable business results and preparing for potentially higher capital costs, Mark Williams told executives at a New York dinner Tuesday, Nov. 10.

Williams is a master lecturer in finance at Boston University's Questrom School of Business and a former Federal Reserve bank examiner. He urged finance chiefs to set clear measures for deciding whether AI projects succeed or fail, and to connect project spending with financial performance.

Williams also recommended considering shorter-term financing. He urged executives to keep risk officers involved in financial decisions, saying, "Hold your chief risk officers close."

His warning about capital costs was a forecast, not a quantified trend. Williams said companies with stronger balance sheets may be better able to continue investing, while those carrying more leverage may need to reconsider their plans.

At its Oct. 28 meeting, the Federal Reserve kept the federal funds target within a range of 3.75% to 4%. Consumer prices increased 0.4% month over month in October, seasonally adjusted, following a 0.6% increase in September on the same basis.

The Fed's target and the monthly inflation figures provide policy and price context, but they do not show whether corporate loan or bond rates have risen. Williams' warning points to a financing risk for companies to plan around; the figures do not establish that businesses are already paying more to borrow.