How CEOs Adapt to AI and M&A Amid Economic Uncertainty
Leadership & Strategy * January 22, 2026
Volatile markets, tense geopolitics, and stubborn cost pressure have CEOs making hard calls. At Davos, Microsoft's Satya Nadella spoke about AI's role in the next phase of tech transformation. Amazon's Andy Jassy was direct about how President Trump's tariffs are feeding through to pricing. Across boardrooms, leaders are moving anyway-faster on tech, sharper on deals. For context, see the World Economic Forum.
Confidence holds, even as sentiment dips
EY-Parthenon's CEO Outlook Survey (January 20) shows leaders remain more confident in their own companies than in the global economy. The CEO Confidence Index slipped from 83.0 in Q3 2025 to 78.5 in Q4 2025, based on 1,200 CEOs across 21 countries. Still, intent to act is clear.
- 40% are accelerating investments in response to geopolitics and trade policy
- 31% are delaying
- 10% are stopping activity
Nine in ten expect to strengthen performance from within-driven by revenue and productivity gains-despite 61% expecting higher operating costs in 2026. Leaders are choosing controlled offense over passive defense.
AI has moved from pilot to core
58% of CEOs expect AI to be a major growth engine within two years. 32% think it will fundamentally reshape operations as they scale enterprise-wide. Over half have launched significant transformation programs this year, and 45% plan to start similar initiatives to create more value.
Janet Truncale, EY Global Chair and CEO, puts it plainly: "Today's most successful CEOs are confident in their ability to operate under uncertainty, acting boldly to embrace new technologies at speed and foster confident collaboration to gain competitive advantage." She adds, "In the year ahead, business leaders need to execute decisively and intentionally by scaling innovation, investing in talent and working closely within their organisation and across industries to create new value."
Andrea Guerzoni, Global Vice Chair of EY-Parthenon, notes that AI is meeting or exceeding expectations for many, but only about 20% are seeing breakthrough returns. His view: CEOs need pragmatic roadmaps and new skillsets to turn pilots into lasting performance. Learn more about EY's perspectives at EY.
- Pick two or three AI use cases tied to revenue or productivity, with clear P&L ownership
- Fund data quality, governance, and model risk basics before scaling
- Stand up a small model ops and risk function to keep deployment safe and fast
- Upskill product, engineering, and analytics leaders; consider executive-focused AI courses to accelerate fluency
Deals are back as a strategic lever
79% of CEOs plan joint ventures and strategic alliances in 2026-up 17 points year over year. 83% adjusted investment strategy in the past 12 months due to trade policy shifts, and 40% sped up investment for the same reason.
Guerzoni's outlook is blunt: this won't be a year of certainty. Winners will rewire capital allocation, face geopolitical risk head-on, and focus on technology-led M&A to build flexible, resilient portfolios that absorb shocks and seize volatility-driven openings.
- Refresh the portfolio: trim low-conviction assets; double down where you have edge
- Build a buy/partner map for data, automation, and AI capabilities that are faster to acquire than build
- Use alliances and minority stakes to test theses before full acquisitions
- Run 100-day integration sprints to lock in synergies-especially data and AI enablement in acquired units
- Price trade policy scenarios into valuations, structures, and supply footprints
What this means for your 2026 plan
Confidence cooled, intent did not. The move is to commit to a focused AI agenda, keep cash flexible for selective deals, and prepare teams for the talent and cost implications. Execute in tight loops: ship, measure, adjust.
- Set three AI metrics that tie to revenue, margin, or cycle time-and review monthly
- Maintain a short list of deal targets and alliance partners aligned to your tech roadmap
- Fund skill-building for leaders who own P&L and product decisions
If your leadership team needs a faster path to practical AI skills, explore AI automation certification or browse courses by job.
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