AI: Growth Catalyst or Cost-Cutting Tool?

The tech world loves a good efficiency story, but EY's Dan Diasio warns companies might be missing the bigger picture. He's convinced that focusing solely on cost-cutting with AI is short-sighted and potentially stifling innovation. Diasio, EY's global consulting AI leader, believes AI's true potential lies in fueling growth, not just trimming the fat.

Chasing the Wrong ROI?

Leaders who zero in on cost reduction are chasing what Diasio describes as the 'smallest level of return.' It's tempting to see AI as a tool for slashing jobs and boosting productivity, but Diasio argues that's a limited view. Sure, AI can shrink task time, but the jobs around those tasks often remain. The real story is more nuanced.

So, what's the alternative? Diasio suggests using AI to unlock new business possibilities. This is where it gets exciting. AI isn't just about doing the same things faster. it's about reimagining how things are done altogether. Why aren't more businesses focusing on this?

The Fear Factor

There's a fear factor at play too. By focusing on AI as a cost-cutting measure, companies can create a culture of fear among employees, stifling creativity and innovation. When folks think AI is just the latest tool to replace them, they're less likely to engage in transformative thinking. If you're feeling the pressure from AI, you're not alone.

AI leaders like Diasio believe in a different narrative. They see AI as a way to 'reimagine an entirely new way of working.' The press release said AI transformation. The employee survey said otherwise. If AI frees up time, the real question is, how do we use that time to drive the company forward?

Growth Over Cost

It's not that cutting costs is bad. It's just not the only story AI can tell. Diasio acknowledges the need for CFOs to see returns on AI investments. After all, big tech is expected to spend nearly $725 billion on capital expenditures in 2026. But focusing solely on efficiency misses the point.

True, AI can beef up productivity in fields like software engineering, speeding up coding and analysis. But it won't replace the need for human oversight, governance, and creativity. It's about balancing automation with the human touch, ensuring outputs don't become too generic or disconnected from real-world needs.

So, will companies heed the call to use AI for growth rather than just cost-cutting? Or will they continue to play it safe? The gap between the keynote and the cubicle is enormous, and bridging it could be the key to long-term success.