After all the big talk about AI, CEOs say the real upheaval is still ahead.
In a KPMG US survey, three-quarters of CEOs of large companies said that while generative AI may have been overhyped in the past year, its true impact and “disruptive potential” over the next five to 10 years is likely to be underestimated.
“There’s no doubt that sentiment around AI is accelerating,” Tim Walsh, the company’s U.S. chairman and CEO, told Business Insider.
He said many organizations are moving beyond the pilot stage to implementation. Investments are being made in what he calls a “disruptive environment.”
KPMG US surveyed 100 CEOs of large U.S.-based companies from late January to mid-February on topics ranging from AI to hiring planning to the economy.
Most CEOs are still investing in AI
One in four CEOs surveyed believe an AI investment bubble exists, but AI remains a major spending category, with nearly 80% of CEOs saying they will allocate at least 5% of their capital budget to AI this year.
Roughly two-thirds of leaders say they are increasing cybersecurity spending amid growing concerns about risks related to AI.
Six in 10 CEOs say they are prioritizing spending on AI over upskilling their workforce. About half said they are using funding to accelerate innovation and integrate technology into daily operations.
While AI training is likely to be welcome news for employees worried about losing their jobs to AI, around one in five CEOs still expect job cuts in the next year.
When asked about the impact of AI, about half expected small or large adoption, while just 9% said they expected the technology to eliminate jobs.
Recruitment challenges
KPMG’s Walsh said AI allows workers to “do things more efficiently, do more, and do things faster.”
That doesn’t necessarily mean that companies will need fewer workers. If a virtual team had 20 people before AI, it might only have 17 people now, he said. At the same time, Walsh added, there may also be five people on the technical side handling tasks such as data extraction, analysis, and transformation to run the actual AI. All told, this brings the number of teams to over 20.
Other CEOs echoed similar sentiments, with 61% saying they were concerned about not being able to hire employees with the necessary technical expertise.
Beyond the staffing level, some executives are concerned that AI could inhibit leadership development. Approximately one in three CEOs cite reduced opportunities for early career employees to develop judgment based on experience as a primary concern. Others point to an over-reliance on AI for decision-making and, to a lesser extent, reduced exposure to ambiguity and trial-and-error learning.
Big concerns about cybersecurity
Six in 10 say the speed of AI innovation and risk management are the factors most likely to influence their company’s prosperity over the next three years.
My boss has serious concerns about security. About 9 in 10 CEOs reported that they are concerned about data and privacy risks posed by AI agents and AI-assisted malware attacks. A similar proportion cited concerns about AI-powered phishing, and 8 in 10 cited insider threats from AI agents.
About 6 in 10 CEOs remain concerned about quantum computing attacks on cryptography.
Walsh said the company leaders he speaks to are concerned about the acceleration of cyber risks and what role AI and agents could play.
More than two-thirds of CEOs say they are concerned about their ability to attract the cybersecurity talent they need. About 6 in 10 leaders are responding by training their existing employees.
economic concerns
CEOs’ views on the outlook for their companies and the broader economy revealed a split screen. While 86% expressed confidence in their industry’s growth and 83% were confident in their company’s outlook for the year ahead, that confidence declined when asked about the economy in general. Only 55% feel good about U.S. growth and 53% feel good about global growth.
KPMG US conducted the study before the war with Iran began and the resulting spike in oil prices (although oil prices were still rising).
Just over half of CEOs viewed policy uncertainty (factors such as tariffs, interest rates and regulations) as the main pressure driving short-term decision-making.
hunger for deals
Despite all the concerns, most CEOs remain motivated to make a deal. Nearly two-thirds said their company would “seriously pursue” a deal in 2026, while another quarter said they planned to postpone the deal until 2027.
Walsh said there has been an increase in large-cap stocks over the past six months or so. He said there is now an increase in medium-sized transactions as well.
The survey found that about half of CEOs reported that there was enough market certainty to make “significant” investment decisions, but one in five said unpredictability hampered their ability to make those decisions.
Mr. Walsh said interest in deals has changed from a year ago, when uncertainty over tariffs hurt M&A activity.
“Companies are just trying to get by on a day-to-day basis, but we’re seeing a continued increase in that activity in the market,” he said.
