The CEO Outlook Pulse |CEOs investing in AI strategy but with challenges emerging

In brief

  • At a time when generative artificial intelligence (GenAI) has created an imperative to act, CEOs acknowledge challenges in developing and implementing AI strategies.
  • Slow-growth companies should reconsider the pace of their investment in AI, since they stand to profit the most from the productivity and efficiency gains it can deliver.
  • M&A appetite drops to its lowest since 2014, with the surge in AI acquisitions slowing as CEOs have difficulty identifying credible AI acquisition targets.

CEOs globally recognize the potential of artificial intelligence (AI), but most are encountering significant challenges in formulating and operationalizing related strategies. While over two-thirds see the need to act quickly on GenAI, a similar proportion also report being stymied by uncertainty in this space, making it challenging to respond at speed.

While the vast majority (99%) are planning to invest in GenAI, the investment landscape is complex. Many CEOs recognize AI’s potential to disrupt their business models and are starting to initiate their response.

Yet, a surge in companies claiming AI expertise complicates decisions about identifying and implementing credible value-adding ecosystem partnerships and acquisitions. This has likely contributed to acquisition appetite falling to its lowest level since 2014, with only 35% of CEOs planning mergers and acquisitions (M&A) in the next 12 months – although other factors such as geopolitical tensions are playing a significant role in the drop.

Generally, CEOs globally are optimistic as they navigate a fresh phase of the global economy and an evolving external terrain. While they are enthusiastic about the prospects AI offers to create efficiencies and fuel growth, they still find themselves navigating economic headwinds and a complex geopolitical environment.

This edition of our quarterly study of 1,200 CEOs globally, the latest part of CEO Imperative Series, focuses on how they are continuing the journey into an AI-enabled future. It also provides insights on capital allocation, investment and transformation strategies, as the economy reverts to a model with higher interest rates and inflation, more geopolitical headwinds but fewer economic tailwinds.

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