AI Investment Surges As CEOs Stay Optimistic Despite Economic Slowdown

Despite falling confidence in the global economy — now at its lowest since the pandemic — business leaders remain upbeat about their own organizations’ futures. KPMG’s 11th CEO Outlook reveals that 79% of CEOs are optimistic about their growth prospects, with many responding to a volatile environment by accelerating investment in AI, workforce development, and sustainability.

Even as geopolitical tensions and economic pressures intensify, CEOs are forging ahead with AI. Over 70% have identified AI as a top investment priority, with nearly the same number allocating up to 20% of their budgets to AI-related initiatives. 

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Notably, expectations for AI returns have shifted dramatically — 67% now anticipate return on investment within one to three years, compared to longer timeframes just a year ago.

Alongside technology, talent remains central. To ensure AI success, leaders are prioritizing upskilling and retraining, particularly of high-potential employees. Over 70% are focused on workforce readiness, while nearly 80% say AI adoption has reshaped how they think about training and development. 

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At the same time, competition for AI-skilled talent is fierce, with 70% citing it as a potential constraint on success.

Rewriting Growth Strategies

A significant 72% of CEOs have revised their growth strategies in response to interconnected risks — ranging from digital disruption to regulatory pressure and ESG demands. While 68% express low confidence in the global economy, 61% still expect revenue growth above 2.5% in the next three years, and 92% plan to increase headcount. 

M&A is also on the agenda, with 89% anticipating moderate to significant activity in the near term.

Risk management is high on the priority list. CEOs are increasingly focused on cyber resilience, regulatory compliance, and responsible AI integration. Over half identify ethical AI challenges, data readiness, and regulatory lag as obstacles to be addressed.

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Leadership in a Time of Complexity

As disruption becomes the norm, the demands on leadership are evolving. CEOs see faster decision-making, transparent communication, and risk prioritization as the most essential capabilities today. 

Many report rising pressure to deliver long-term success, particularly as AI, digital transformation, and sustainability reshape business imperatives.

Workforce demographics add another layer of complexity. With an aging labor force and a widening generational skills gap, 88% of CEOs expect significant impact on talent acquisition and retention. 

Leaders are now also navigating generational differences in attitudes toward technology and future skill requirements.

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Sustainability Gains Momentum

Sustainability remains a core priority, with 61% of CEOs now confident in reaching their 2030 net-zero targets, up from 51% last year. AI is being leveraged to enhance ESG reporting, identify efficiency gains, and support emissions reduction efforts. 

Still, challenges remain: decarbonizing supply chains and a shortage of ESG expertise are seen as key barriers.

Sustainability is being increasingly integrated into core strategies: 65% of leaders report it is fully embedded in their business models. However, only 29% have factored it comprehensively into capital expenditure decisions, suggesting room for improvement in aligning sustainability with investment planning.

Balancing Innovation with Responsibility

As CEOs embrace AI and digital transformation, they are also navigating issues of governance, ethics, and transparency. Most believe their boards are equipped to handle technological change, and 84% encourage employee experimentation with AI tools. But 63% are concerned about the cultural impact of these technologies and employee resistance to change.

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Despite these challenges, the overarching sentiment is one of cautious optimism. CEOs are betting on agility, innovation, and people to carry their organizations through a complex, high-stakes era. 

Those who can strike the right balance between opportunity and risk are expected to lead the next wave of sustainable growth in the future of work.

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