Look at the internet: it gives us instant access to endless information, but it’s also ruined our attention span. Social media connects us, and also leaves many feeling isolated. Similarly, as AI handles more data, decisions, and insights, leaders have a new duty to not just use these tools, but to humanize them.

Harvard Business Review says it will also change what being a leader means. In this article, we’ll discuss the connection between AI and leadership and how you can harness its potential ethically.

AI’s Growing Role in Leadership

The global AI market is projected to reach $1.8 trillion by 2030, and its influence on leadership has been heavily documented recently. A McKinsey survey states that 78% of companies reported using at least one AI function in 2023. Leaders are also feeling the pressure to adapt, with 70% of CEOs expecting AI to majorly alter their role within the next five years, according to PwC.

You’ll also note that leaders at major corporations are adopting AI faster than ever. For instance, JPMorgan Chase uses AI to analyze billions of transactions to flag fraud faster than any human-led system. Meanwhile, Unilever uses AI to screen and shortlist job candidates, cutting recruitment costs by 75% and expediting hiring decisions.

Soon enough, leadership today will be less about instinct and more about interpreting AI-driven insights. That’s why companies are already looking for leaders with the ability to navigate data-heavy, AI-dependent decisions.

AI and Decision-Making

For most of history, leadership decisions relied heavily on intuition and experience. Of course, data analysis has played a huge role in informing these decisions, too, but AI is truly changing the game. Leaders now have predictive insights that process millions of data points in seconds.

That’s why major companies are already using AI to inform executive decisions. Walmart, for instance, has reduced out-of-stock incidents by 30% thanks to AI-powered supply chain optimization.

Plus, 2025 research shows that AI adoption has led to a 58% faster decision-making process and a 41% increase in strategic accuracy compared to traditional, intuition-based models. This means leaders can act more quickly when they have the confidence of real-time dashboards.

AI also makes decision-making less risky. Finance companies have begun using predictive models to detect anomalies that flag fraud or unstable credit patterns early. In healthcare, AI systems can predict patient deterioration for better allocation of resources.

However, despite these upsides, there’s still a danger in leaning too heavily on machine outputs. Since AI algorithms can’t fully account for cultural nuances, human motivation, or ethical gray zones, leaders have a new responsibility.

They must treat AI as a way to boost efficiency, not a complete replacement. The best decisions come from data-backed insights and the human capacity to interpret context and see beyond the data.

AI and People Leadership

AI doesn’t just serve leaders in strategy and operations, but it can also change how you manage people. In HR, AI-driven tools are already being used to predict, prevent, and even improve workforce outcomes.

For example, IBM’s AI-powered HR assistant reduces attrition by flagging employees at high risk of leaving. This way, managers can intervene early on with retention strategies. Similarly, Microsoft Viva Insights monitors workplace patterns to identify signs of burnout or declining engagement, so leaders act before morale drops.

It’s no secret that this type of technology comes with risks. AI systems that track keystrokes, emails, or time spent online can easily snowball into “surveillance” culture. The implications go beyond privacy, as this constant monitoring can push employees to disengage. In fact, 55% of workers say they’re uncomfortable with AI monitoring productivity, according to Pew Research.

While AI can improve HR outcomes by making people management more proactive and personalized, trust always comes first. Leaders need to set transparent boundaries around how AI is used and make sure employees don’t feel watched.

Ethical and Responsible AI Leadership

AI is a great efficiency booster in all departments, but it also introduces serious ethical risks, such as bias. In hiring, policing, and credit scoring, biased AI algorithms have repeatedly produced unfair outcomes. That’s why 75% of HR leaders cite bias as a top concern when using AI hiring tools.

Their fear is justified, as Amazon’s recruitment AI was scrapped after it consistently downgraded applications from women. The system had been trained on past hiring data, which reflected a male-dominated workforce, and the bias carried over into its recommendations. Instead of leveling the playing field, the AI algorithm just reinforced older issues.

This creates an opportunity for responsible leaders to do better. Instead of deferring accountability to “the algorithm,” they must decide how AI is implemented. That includes maintaining transparency and explainability of algorithms and setting clear accountability standards when things go wrong.

Companies like Microsoft have already recognized this, forming dedicated AI ethics teams after public backlash over its facial recognition technology.

AI and Leadership: What The Future Looks Like

As more businesses embed AI in their core frameworks, leadership is moving toward an “augmented” model. That means algorithms will handle analytics and repetitive decision support. Meanwhile, leaders can focus on what machines can’t replicate, such as creativity, long-term vision, and human connection.

However, leaders will need a new skill set to thrive in this environment, including:

Tech Literacy: That doesn’t mean coding expertise, but the ability to understand and question AI outputs.
Ethical Judgment: This skill will soon be central, since guiding AI responsibly is a leader’s duty and not something that can be outsourced to employees.
Emotional Intelligence: A high EQ will differentiate leaders who can balance data-driven efficiency with empathy and trust.

Employees are already demanding leaders with these skills. According to a 2025 survey, 66% say they’d trust AI more if leaders communicated transparently about how it’s used. Companies that embrace this, like Google DeepMind, have built credibility by openly explaining the limits of their AI models rather than overselling them.

Conclusion

It’s not news that AI is changing the way leaders decide, manage, and earn trust. However, as a responsible leader, you can’t thrive by blindly adopting every new technology.

Instead, if you can interpret data, act ethically, and keep people at the center, you have a better chance at making the most out of AI than anyone. The solution is simple: make the best use of both AI and leadership in your processes.