CEOs are primarily concerned with mitigating the compounding and interconnected risks that could negatively impact their businesses’ short-term profitability and long-term success, according to a survey by consultancy firm KPMG. This is especially so given the proliferation of Generative AI. KPMG has coined this phenomenon “compound volatility,” referring to the convergence of near-term growth challenges and structural shifts in the US economy that increase operational costs and demand precise strategic planning and execution.
The urgency to realize the value of GenAI investments is growing, while CEOs remain committed to its ethical and effective deployment. As they strive to keep up, CEOs are focusing on the long-term strategic implications of GenAI, including its potential to disrupt their businesses, reshape the competitive landscape, and create new business models and revenue streams. They are also addressing structural changes like a dynamic labor market and potential shifts in regulations and taxes.
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While CEOs increasingly favor a full return to the office, they acknowledge the ongoing need for flexibility. They anticipate that GenAI will have minimal impact on job numbers but recognize its potential to transform how work is done, necessitating workforce upskilling and improved resource management.
The latest edition of the KPMG CEO Outlook analyzed insights from more than 1,300 CEOs at large companies globally, including 400 in the United States, to evaluate how they are continuing to navigate the challenge of compound volatility.
CEOs are most likely to invest in information technology (74%), sales and marketing (59%), and finance and accounting (48%) when considering GenAI adoption within their organizations over the next three years.
CEOs are relatively uncertain about their organization’s preparedness for GenAI adoption. They express concern about having the necessary data infrastructure (34%), employee skillsets (39%), and robust governance frameworks (56%) in place to safely and effectively integrate GenAI.
In addition, KMPG found:
37% are unsure if their organization’s cybersecurity can keep pace with rapid AI advancements.
41% are unsure if they will be able to secure the talent and solutions they need to defend against AI threats.
69% are increasing their investments in cybersecurity to protect their operations and IP from AI threats.
68% say GenAI is a top investment priority despite uncertain economic conditions.
21% expect to see return from their investments in GenAI in just one to three years.
68% expect to see return from their investments in GenAI in three to five years.
“The pressure to unlock value from GenAI investments is intensifying, while CEOs continue to prioritize its ethical and effective use,” said Paul Knopp, Chair and CEO at KPMG US. “CEOs are working to keep pace, and they are focused on the long-term strategic considerations, including its potential to disrupt their business, reshape the competitive landscape, and develop new business models and revenue streams. KPMG is helping clients strategize and position their organizations for long-term, sustainable returns with GenAI.”
