TL;DR: a fractional AI CTO or CAIO typically costs $5,000 to $15,000 per month for one to two days a week of senior involvement. A full-time AI executive costs $300,000 to $500,000+ a year plus equity, before you hire the team under them. For most companies between 20 and 200 people, fractional is the only version of this role that makes economic sense. My own retainer runs $6k to $12k per month.
What you are actually paying for
The retainer is not for hours. It is for judgment plus execution: someone senior enough to own AI strategy in front of your board, and technical enough to build what they propose. In my case that means the strategy, the governance (privacy, compliance, EU AI Act readiness) and the code itself, from one person.
The market ranges in 2026
- Advisory-only fractional CAIO: $4k to $8k per month. Strategy, vendor selection, governance. No building.
- Strategy plus build (my model): $6k to $15k per month, one to two days a week. The roadmap ships because the person who wrote it implements it.
- Full-time Chief AI Officer: $300k to $500k+ base in the US, plus equity, plus the ML engineers they will ask to hire. McKinsey's State of AI research keeps showing that most companies still struggle to get value from AI at any spend level, which is exactly why the ownership question matters more than the headcount question.
What drives the price up or down
Scope drives everything. A retainer that only covers a living roadmap and governance sits at the low end. Add production builds, team training and vendor oversight and you move up the range. Regulated industries (health, finance, legal) price higher because governance work is heavier.
When fractional beats full-time
If AI is your core product, hire full-time. If AI needs to run inside your product and operations and you are under ~200 employees, a full-time AI executive is usually premature: you need 8 to 10 hours a week of the right judgment, not 45 hours of someone learning your business. Start smaller: my free 3-minute AI readiness assessment tells you where you stand before you spend anything, and I wrote a companion piece on the signs you need a fractional AI CTO.
How I structure it
Three steps, each one earning the next: a Readiness Sprint (from $5k, 2 to 4 weeks), an Implementation Sprint (custom, first use case live in production), then the fractional retainer ($6k to 12k per month). No lock-in: handover and documentation are part of every engagement.