CEOs Push AI Investment Higher Despite Geopolitical Turmoil
Eighty percent of chief executives plan to increase artificial intelligence spending in 2026, even as geopolitical instability and energy shocks create operational headwinds. A survey of 1,200 CEOs across 21 countries found that business leaders are treating AI as essential infrastructure rather than experimental technology.
The findings reveal a stark contradiction: executives view AI as both a critical growth driver and a mounting source of operational and regulatory risk. They're investing anyway.
Geopolitical Risk Now Tops the CEO Agenda
More than half of CEOs (56%) identified geopolitical instability as their biggest business risk over the next 12 months. This represents a 28-percentage-point jump since September 2025. Nearly half also cited sustained energy price shocks as a major threat.
Yet executives are not retreating from investment. Instead, they're shifting toward more disciplined strategies focused on profitability and operational resilience rather than rapid expansion. Eighty-two percent said they're prioritizing sustainable long-term growth over rapid market expansion.
M&A Activity Driven by AI Capability Gaps
Nearly half of CEOs (48%) are pursuing acquisitions or divestments specifically to strengthen AI and technology capabilities. Eighty-nine percent of executives planning deals expect M&A activity to increase over the next year.
The US remains the leading target for planned acquisitions, followed by India, the UK, Canada, and Germany. For many CEOs, deals are a direct response to talent and capability shortages.
AI Investment Accelerating Across Functions
Only 1% of CEOs expect to reduce AI spending. Executives report measurable business impact from AI deployment across operations (41%), customer value creation (42%), innovation (40%), and corporate strategy (41%).
Eighty-three percent of CEOs remain optimistic about emerging technology investment generally, suggesting confidence in the long-term value of AI despite implementation challenges.
Regulation Becoming a Real Obstacle
Fragmented global AI regulations are creating compliance headaches. Thirty percent of CEOs said AI regulation is increasing operational complexity, while 38% cited fragmented global rules as a major barrier to scaling AI systems.
As governments move toward stricter oversight of generative AI and autonomous systems, companies are investing in governance frameworks to manage regulatory risk alongside operational and ethical concerns.
The Workforce Question: Reskilling, Not Replacement
Contrary to widespread automation fears, only 20% of CEOs said AI would reduce hiring. This figure has dropped significantly from 46% in 2024. Ninety-nine percent expect AI to reshape workforce strategies within three years, but most see reskilling as the priority.
Forty-two percent expect large-scale reskilling initiatives. Forty-four percent are redesigning jobs to combine human and AI capabilities. One in five CEOs identified limited AI and data skills as a major workforce challenge.
Andrea Guerzoni, Global Vice Chair of EY-Parthenon, said: "CEOs do not currently see AI as a substitute for human labour. As AI becomes embedded across businesses, demand is rising for talent that combines deep domain expertise with AI literacy."
A Shift From Urgency to Strategy
For the past two years, much AI investment was driven by competitive fear following the rise of generative AI. Now CEOs are integrating AI into broader transformation strategies focused on resilience, efficiency, and sustainable growth.
The result is an enterprise AI market increasingly defined by disciplined execution and measurable operational impact rather than experimentation alone. Investment is accelerating, but with clearer business logic behind it.
AI Strategy for CEOs covers how executives can align AI investment with business outcomes and manage implementation risks.
Your membership also unlocks:
