CEOs are increasing investments in artificial intelligence and talent to pursue growth amid declining confidence in the global economy, according to the KPMG Global CEO Outlook report released for 2025.
The report, based on a survey of 1,350 chief executives, shows confidence in the world economy has reached a five-year low. The corresponding index is now 68 percent, down from 72 percent a year earlier. Despite this global pessimism, 79 percent of CEOs remain optimistic about their own organizations’ prospects.
This optimism is linked to projections of accelerated growth, with 61 percent of executives forecasting profit growth of at least 2.5 percent over three years. A key factor is a shortening investment payback window, as 67 percent of CEOs now expect a return within one to three years, a shift from the three-to-five-year period anticipated by the majority in 2024.
The survey was conducted between August 5 and September 10, 2025, with 1,350 CEOs from companies with annual revenues over US$500 million or €428.87 million. Participants represented 11 major markets and 12 industry sectors.
Bill Thomas, global chairman and CEO of KPMG, stated, “Ultimately, the leaders who can embrace market volatility and focus investments in the right strategic areas for their organisation will be the ones best placed to unlock new opportunities and build sustainable, long-term growth.”
Artificial intelligence is a primary focus of this strategic investment. The report reveals 71 percent of CEOs now list AI as a top priority, up from 64 percent last year. This is supported by budget allocations, with 69 percent of leaders dedicating 10 to 20 percent of total budgets to AI initiatives.
The integration of AI is also reshaping workforce management. The report indicates 59 percent of chief executives are redeploying staff from traditional roles into new, AI-enabled positions. Concurrently, 41 percent of leaders acknowledged that staff layoffs will occur in certain business areas as a direct result of this technological disruption.
Workforce preparation is seen as critical for AI success. A majority of 77 percent agreed that employee AI readiness and upskilling will materially influence organizational prosperity over the next three years. A potential constraint was also noted, with 70 percent warning that competition for specialized AI talent could impede company success.
As investment grows, executives are mindful of what the report calls “non-trivial risks.” Ethical issues related to large-language models were cited as a key challenge by 59 percent of respondents. Additionally, 50 percent pointed to the absence of clear regulation governing AI’s use and application as a significant concern.
To navigate global volatility, 72 percent of CEOs have adjusted growth plans to address economic and geopolitical shocks. Many are leveraging mergers and acquisitions, with 89 percent anticipating M&A will have a moderate to significant impact on their business in the next three years. This strategy is used to diversify revenue, expand geographic reach, build scale, and realize cost synergies.
A risk-focused perspective is guiding spending decisions, with CEOs identifying key priorities for investment:
- Cybersecurity and digital resilience: 39%
- Regulatory compliance and reporting: 36%
- AI integration: 34%
Commitments to Environmental, Social, and Governance (ESG) issues remain prominent. The report found that 61 percent of CEOs are on track to meet 2030 net-zero goals, up from 51 percent a year ago. KPMG noted that some firms may have altered interim milestones to follow a “more realistic” sustainability strategy while remaining “strongly committed to ESG issues.”
Executing ESG objectives presents challenges. Decarbonizing complex supply chains is the most significant hurdle, cited by 25 percent of CEOs. Another obstacle is a skills gap, with 21 percent pointing to a lack of expertise to implement sustainability solutions. The cost of implementation was considered a lesser problem, with only 11 percent of CEOs identifying it as a primary barrier.
