Appearing for the first time in Gartner’s Quarterly Emerging Risk Report, AI strategy miscalculation was cited as the third most concerning issue by the 308 enterprise risk management (ERM) leaders, auditors and senior executives surveyed. The issue ranks behind AI discovery of cyber vulnerabilities, and geopolitical energy supply shocks, which held the top two risk concerns for last quarter as well.

“AI risk is moving beyond technology and governance concerns into the core of enterprise strategy,” said Kevin Mercado, Senior Principal Analyst, Research, in the Gartner Risk & Audit Practice. “The emergence of AI strategy miscalculation and AI-driven competitive displacement reflects growing concern that organisations could either make major decisions based on anticipated benefits that fail to materialise or lose ground to competitors that use AI more effectively.”

AI strategy miscalculation involves investing in AI too aggressively, selecting unsuitable use cases or moving ahead before organisations are prepared to manage the technology’s operational, cultural and governance implications. Competitive urgency can outpace organisational readiness and create AI strategy miscalculations.

“Organisations risk pursuing AI initiatives without sufficiently testing whether the use case aligns with business priorities, risk tolerance, available capabilities and expected returns,” said Mercado.

According to information released at the recent Gartner symposium in Orlando, Florida, by 2029, 30% of employees who were terminated and replaced by AI will be rehired, often at a higher cost, as organisations struggle to align workforce decisions with evolving business needs.

“Many organisations are making AI and workforce decisions in the wrong order,” said Caitlyn McDonough, Vice President Analyst in the Gartner HR practice. “They decide how many people to let go before they understand what it will take to get work done. The goal should be to understand what work matters most to the strategy, how that work is changing, and the right mix of people and technology needed to deliver business outcomes.”

Gartner analysts recommend creating a strategic AI action plan to help ERM leaders manage risk and create value by addressing common mistakes at each stage of the AI journey.

Risk leaders can help embed these kinds of resolutions across the organisation, regardless of whether they are framed as value-creation initiatives or risk-mitigation activities. This includes ensuring that AI investments are tied to strategic priorities, that readiness and governance requirements are addressed before scaling, and that value is measured through AI’s impact on decision-making, not just productivity.

“Organisations should evaluate AI as a portfolio of business decisions,” said Mercado. “The organisations most likely to realise sustained value will connect AI investments to clear business outcomes, validate readiness before scaling and establish governance that supports responsible experimentation.”