CEOs Bet on AI and Talent Despite Five-Year Low in Global Confidence

CEOs Lean Into AI and Talent as Confidence in the Global Economy Slips

Confidence in the world economy has hit a five-year low. The KPMG Global CEO Outlook puts the index at 68%, down from 72% last year. Even so, 79% of CEOs remain upbeat about their own companies, and 61% forecast profit growth of at least 2.5% over the next three years.

The investment lens is getting sharper. Sixty-seven percent now expect payback within one to three years, a clear shift from the three-to-five-year window most leaders used in 2024. The survey covered 1,350 CEOs from companies with revenues above US$500 million/€428.87 million across 11 markets and 12 sectors.

As one executive summary put it: leaders who embrace volatility and focus capital on the right strategic areas will be best positioned to create durable growth.

Signals executives should act on

• Macroeconomic confidence: 68% (five-year low).
• Company-level confidence: 79% optimistic about their own prospects.
• Profit outlook: 61% expect ≥2.5% growth over three years.
• Payback horizon: 67% targeting returns within 1-3 years.

AI is the core bet

• Priority: 71% list AI as a top strategic focus (up from 64%).
• Budgets: 69% are allocating 10-20% of total spend to AI initiatives.

The takeaway: AI is moving from pilots to portfolio. Expectations are faster returns, clearer business cases, and tighter governance.

Workforce redesign is underway

• Redeployment: 59% are moving people from traditional roles into AI-enabled positions.
• Reductions: 41% acknowledge layoffs in some areas tied to tech disruption.
• Readiness: 77% say AI upskilling will materially influence success within three years.
• Constraint: 70% warn competition for AI talent could impede results.

Practical moves: stand up an internal AI academy, create role-based skill maps, and fund redeployment programs alongside automation. Treat org design, change management, and incentives as core enablers-not afterthoughts.

Risk, regulation, and resilience

• Ethics concerns: 59% cite large-language-model risks as a key challenge.
• Regulatory uncertainty: 50% point to a lack of clear rules as a major issue.
• Spend priorities: 39% cybersecurity and digital resilience; 36% regulatory compliance and reporting; 34% AI integration.

If you need a practical baseline for controls, consider the NIST AI Risk Management Framework for structure and language your teams can execute on. NIST AI RMF

Growth under volatility: Deals and diversification

• Plan adjustments: 72% have revised growth plans to address economic and geopolitical shocks.
• M&A impact: 89% expect moderate to significant impact from M&A over the next three years.

Use M&A to diversify revenue, expand geographic reach, build scale, and realize cost synergies. Pair that with a disciplined integration playbook and a value-capture PMO from day one.

ESG: Progress with friction

• Net-zero trajectory: 61% say they are on track for 2030 goals (up from 51%). Some firms have reset interim milestones while staying committed.
• Biggest hurdles: Decarbonizing supply chains (25%), skills gaps (21%), and implementation costs (11%).

Translate targets into supplier programs, data transparency, and financing mechanisms. Focus investments where emissions and cost curves move together.

What to do next (90-day agenda)

• Rebase investment cases to a 1-3 year payback and tie funding tranches to measurable milestones.
• Define an AI portfolio: top use cases, owners, guardrails, and a 10-20% budget envelope with quarterly reviews.
• Launch an AI skills sprint across priority roles; map redeployment paths and set hiring targets where gaps persist. For role-based upskilling options, see Complete AI Training - Courses by Job.
• Stand up AI risk controls: model inventories, human-in-the-loop checkpoints, security reviews, and compliance reporting.
• Refresh the M&A pipeline with a clear thesis (diversification, scale, capability) and prebuilt integration playbooks.
• Prioritize cybersecurity and compliance investments that unlock AI adoption safely across functions.
• Operationalize ESG: segment Scope 3 suppliers, set transition levers (materials, logistics, energy), and align incentives with outcomes.
• Instrument outcomes: track value by use case, by business unit, and by talent metrics (adoption, proficiency, productivity).

The strategy lens for 2025

Shorter paybacks, bigger AI bets, and tighter operating discipline are setting the tone. Treat AI and talent as compounders, M&A as a capability accelerator, and risk controls as enablers of speed-so growth compounds while volatility persists.