While security and data privacy are huge risks with AI agents, the most immediate and tangible pain point for businesses is cost. An unexpectedly large bill from a runaway agent is often the catalyst for seeking a governance solution, which then leads to addressing deeper security issues.

Alex Karp states enterprises are skeptical of AI ROI and fear that feeding data to frontier models from OpenAI and Anthropic trains these platforms to understand and eventually replicate their core business. This IP risk is a major hurdle for adoption, which Palantir positions itself to solve.

Beyond data privacy, enterprises are concerned that AI agents powered by frontier models will absorb their institutional knowledge. This creates a risky operational dependence where core business learnings are owned and controlled by an external AI company, not the enterprise itself.

A CIO can survive a standard data breach, but a CIO who gives away proprietary company data to an AI model will be fired. This distinction explains the high level of caution from IT leaders, which is rooted in existential career risk, not just resistance to new technology.

As highlighted by Palantir's CEO, corporations are wary of feeding proprietary data into large AI models. They fear AI companies will train on their data to launch competitive products, as seen with Figma, while also struggling to justify the high token costs and measure tangible business returns.

The most heated topic among Fortune 500 CIOs is no longer which AI model is most powerful, but how to manage unpredictable and soaring token costs. Companies are struggling to find the right strategies—from workload prioritization to user-based access tiers—to create a predictable cost model in a rapidly evolving tech landscape.

Using public AI models leaks sensitive corporate data, as prompts and agent traces are sent to model providers. To protect proprietary information and maintain control, enterprises may revert to costly but secure on-premise infrastructure, reversing a 20-year trend of cloud migration.

The primary driver for major AI labs building out "AI control" teams isn't long-term existential risk, but the immediate commercial threat of AI agents causing accidental harm. Companies are worried about agents deleting production databases or leaking sensitive IP, making AI control a necessary security measure for deploying these powerful but unpredictable products.

CIOs report that the unbudgeted 'soft costs' of implementing AI—training, onboarding, and business process change—are the highest they've ever seen. This extreme cost and effort will make companies highly reluctant to switch AI vendors, creating strong defensibility and lock-in for the platforms chosen during this initial wave.